This does not mean that corporate default risks
are permanently lower," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.
So it's no longer just interest rate and default risks
that are getting the attention of examiners.
With these differences in swap and bond default risks
, swap-pricing theory implies that the yield on a par bond of equivalent maturity will be greater than or equal to swap bid-ask rates due to the existence of greater default risk
It is found that when the insurable and the default risks
are independent, underinsurance on average is optimal if insurance is fair or unfavorable.
6 /PRNewswire/ -- A new Fitch study released today identifies and quantifies commercial real estate default risks
for the first time on a publicly reported basis.
This finding strongly suggests that insured bonds with differing intrinsic default risks
are not priced equally as they should be if the complete insurance coverage is a valid signal of bond quality.
Speculation occurs when instruments with low credit ratings or high default risks
are purchased to obtain higher yields.
Applicable Criteria and Related Research: Keys to Uncovering General Government Bond Project-Related Default Risks
(Essentiality, Affordability, and Feasibility) http://www.
Lenders should remain cautious since default risks
Whether setting loss reserves or pricing new loan products, the most pressing need for lenders may be in learning how to measure and price default risks
in residential loans.
These utilities' default risks
generally exceed those of traditional municipal SRF borrowers, but most lending should continue to be to creditworthy systems with established local franchises and state regulatory oversight.
Real estate valuations may be subject to factors such as interest rate and default risks
, changing general and local economic, financial, competitive, and environmental conditions.