Thursday, 30 May 2013

Professor Altman on the Probability of Default for Spain, Italy, Portugal and France

Edward I. Altman, professor at the Stern School of Business at New York University and the architect of the Altman Z-Score, recently stated the probability of default (PD) for some of the European countries over the next five years based on his Z-metrics (the third generation of Altman’s Z-score model),
“Over the next five years the PD for Spain and Italy is over 25%, and for Portugal it’s 40%. In addition the Z-metrics model shows a sharp upturn in risk for France recently, with its PD climbing towards 12%. It is clear that all these European countries haven’t cured their fundamentals and growth is a very distant prospect, especially given the strong euro and lack of needed labor reforms. If you want a short, short France,” 

Read the full article here including PDs for companies in various European countries. 

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