![Default Risk](https://img-cdn.financeunlocked.com/headers-images/financeunlocked/2.jpg?ik-sdk-version=javascript-1.0.3)
Default Risk
Default risk analysis measures the likelihood or probability that a corporate or sovereign borrower might default on making timely interest or principal payments or their debt obligations. Probability of default, or PD, analysis results in an expected loss calculation. The financial markets utilise a range of PD models.