Bloomberg Default: Risk (DRSK)

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Date: 10/11/2017

CONTENTS
WHAT IS BLOOMBERG DEFAULT RISK (DRSK)?

Toolbar 03
Issuer Default Risk 03
Sector Comparison 04
Legal Disclaimer 04
Code of Conduct Disclosure 04
USING DRSK 05
Loading a Company 05
Issuer Default Risk 05
Sector Comparison 06
Updating Model Inputs 07
Resetting Default Data 09
History Chart 10
Term Structure Chart 11
Default Risk Scale 12
DRSK Methodologies 13
DRSK Custom Data 14
DRSK Case Studies 17
Settings 17
CALCULATIONS 19
Public Firm Coverage 19
Private Firm Coverage 19
DOCUMENTS & VIDEOS 20

Brochures 20
White Papers 20
Fact Sheets 20
Videos 20
LEARN MORE 22
Screening Methods 22
Investment Screening 22
Monitor Portfolio Credit Risk 22
Risk Management 22
Individual Name 23
DEFINITIONS 24

WHAT IS BLOOMBERG DEFAULT

RISK (DRSK)?
DRSK analyzes the credit health of a company by estimating the default probability over the next year, as well as other key
tenors, including 3/6/9 months and 2/3/4/5 years, so you can quickly determine the credit health of a given company. DRSK
provides timely information that reflects current market realities, transparency into the drivers of default probability, and user
overrides of key inputs.
DRSK is divided into a toolbar and two analysis sections. The toolbar allows you to enter a company for analysis, access
DRSK methodology information, download a DRSK template, and customize your analysis. The Issuer Default Risk section
allows you to perform extensive default risk analysis of the loaded company, while the Sector Comparison section displays
credit metrics.

TOOLBAR
The toolbar allows you to load a new company for analysis, access calculation methodologies, and customize your analysis.
• For more information on loading a company for analysis, see Loading a Company .
• For more information on DRSK methodologies, see DRSK Methodologies .
• For more information on adjusting DRSK settings, see Settings .
ISSUER DEFAULT RISK

The Issuer Default Risk section displays basic default risk and default probability, as well as a chart that allows you to compare
risk variables. You can adjust model inputs so you can immediately see the sensitivity of default likelihood to the inputs.
Date printed: 10/11/2017 WHAT IS BLOOMBERG DEFAULT RISK (DRSK)? //03


• For a breakdown of this section, see Issuer Default Risk.

• For information about Bloomberg's default risk scale, see Default Risk Scale
• For DRSK use case examples, see Learn More.
SECTOR COMPARISON
The Sector Comparison section allows you compare the loaded company to peers in a specific country or across all countries.
Depending on the security you are analyzing, your options vary. The Sector Comparison section is divided into the following
components
• For more information about comparison options, see Sector Comparison.
• For more information on the credit metrics that appear, see Definitions .
LEGAL DISCLAIMER
DRSK is a service provided by Bloomberg Finance L.P. and its affiliates ("Bloomberg"). Bloomberg is not a Nationally
Recognized Statistical Rating Organization (NRSRO) in the United States or an officially recognized credit rating agency
in any other jurisdiction. Bloomberg's default risk analytics have not been solicited by issuers and issuers do not pay
Bloomberg any fees to generate them or to evaluate their securities. Customers should not use or rely on Bloomberg's
default risk calculations to comply with applicable laws or regulations that prescribe the use of ratings issued by accredited
or otherwise recognized credit rating agencies. Neither the DRSK default risk nor any other data provided in DRSK express
an opinion on the future or projected value of any security and are not research recommendations (i.e., recommendations as
to whether or not to "buy," "sell," "hold," or to enter or not to enter into any other transaction involving any specific interest)
or a recommendation on an investment or other strategy. The information available via DRSK should not be considered as
information sufficient upon which to base an investment decision.
No aspect of the DRSK ratings or other data is based on the consideration of an investor's individual circumstances. You
should determine on your own whether you agree with the DRSK data. DRSK is offered where the necessary legal clearances
have been obtained. DRSK should not be construed as tax or accounting advice or as a service designed to facilitate any
DRSK subscriber's compliance with its tax, accounting, or other legal obligations. Employees involved in the DRSK services
may hold positions in the securities included in the DRSK services.
Bloomberg, in providing the DRSK services, believes that the information it uses comes from reliable sources, but does not
guarantee its accuracy.
CODE OF CONDUCT DISCLOSURE

Bloomberg Finance L.P. and its affiliates including Bloomberg L.P. (“Bloomberg”) have adopted internal procedures
that govern the conduct of Bloomberg and their employees in providing BVAL, BVAL Derivatives Service, CVAL, DRSK,
Bloomberg Intelligence, and BDVD (collectively, the “Valuation/Research Products”) to subscribers. These procedures are
designed to ensure fair presentation and the disclosure of financial interests and conflicts of interests.
To read the complete disclosure, see Code of Conduct Disclosure.


USING DRSK
The following topics explain how to use DRSK to analyze the credit health of companies. For a description of the function, see
What Is Bloomberg Default Risk (DRSK)?.
LOADING A COMPANY
You can load a different company for default risk analysis.
To load a new company, enter the security's name in the keyword search field, then make a selection from the autocomplete
menu.

The security loads with the corresponding data in DRSK.

Note: If you enter a company that is undergoing M&A activity, the following message appears: "The output for this model is
invalid, because the company is involved in a merger or acquisition." Click Proceed to enter DRSK using the security or click
Exit DRSK.
ISSUER DEFAULT RISK

The Issuer Default Risk section displays basic default risk and default probability, as well as a chart that allows you to compare
risk variables. You can adjust model inputs, so you can immediately see the sensitivity of default likelihood to the inputs.
For an overview of this section, see Issuer Default Risk .



The Issuer Default Risk section is divided into the following sections:
• Bloomberg Probability of Default: Displays Bloomberg's scale for likelihood of default (derived from the 1-Yr Default
1
Risk value in the Model outputs section). For more information, see Default Risk Scale .
• 2 3
Model Inputs: Allows you to adjust market and fundamentals data, such as Share Price and Short-Term Debt values.
You can also access data transparency on the input construction and source. For more information, see Updating Model
Inputs.
• Analysis Chart: Depending on your criteria, the chart displays historical values over a specified time range or term
structure values. The variables option above the chart allows you to switch between historical and term structure analysis.
For more information, see History Chart.
SECTOR COMPARISON
The Sector Comparison section allows you compare the loaded company to peers in a specific country or across all countries.
Depending on the security you are analyzing, your options vary. The Sector Comparison section is divided into the following
areas:
For an overview of this section, see Sector Comparison.

1 The Bloomberg Company Default Risk.

2 The overnight closing price. Note that DRSK supports both American (USD) and Canadian (CAD) currencies.
3 The short-term debt from the last quarterly filing. Short-term debt is typically paid in under one year and includes
bank overdrafts, short-term debts and borrowings, repurchase agreements (repos) and reverse repos, the short-term
portion of long-term borrowings, current obligations under capital (finance) leases trust receipts, bills payable, bankers
acceptances, and the current portion of hire purchase creditors.


The Sector Comparison section is divided into the following sections:

• Comparison Options: Allows you to compare your loaded firm to a set of firms determined by sector and geography. You
can click the Sector Comparison | DRAM link to access DRAM, which allows you to compare companies based on their
level of default risk. For more information, see DRAM <Help>.
4
The options for comparison differ, depending on the loaded company. The option you choose from the Region-Sector
field is tied to the selected security. For example, the Region-Sector options for IBM US <Equity> are "United States
of America" or "North America" and "Technology: Software & Services" or "Technology," but for VOD LN <Equity>
the Region-Sector options are "United Kingdom", "West Europe", or "All Countries" and "Communications" or
"Communications: Wireless Telecom Services".
The updates you make to the Region-Sector fields affect the data in the rest of the section.
• Fundamentals: Shows how your loaded firm compares across a set of common financial credit metrics in the selected
Region-Sector field. You can select any Credit Metric to plot the data in the analysis chart in the Issuer Default Risk
section.
The second column displays values for the loaded company. The 10 PCTL and 90 PCTL columns display values for the
related companies in the tenth and ninetieth risk percentiles, while the Range chart in the middle displays the median and
weighted average credit values of companies in that sector. The blue dot represents the loaded company.
• Risk Distribution: Displays the one-year default risk distribution for all the companies in the selected sector. You can
position your mouse over each bar to display the number of companies in that distribution. You can also click any bar to
access more information in DRAM. The blue line represents the loaded company.
UPDATING MODEL INPUTS

In the Model Inputs section, you can change model inputs to estimate the credit health / default risk of your loaded company
under different scenarios (e.g., share buybacks, debt issuance, or increased market volatility).
Steps:
1. Select the Override checkbox.
4 Allows you to choose related industry sectors for comparison and compare related companies in different geographic
regions.


2. Update the activated data field value. (e.g., Share Price), then press <GO>.

Note: Depending on the security you have loaded, the options that you can update may vary. For some companies, the
5
stock price and fundamental data may be in different currencies. For understanding leverage, the Market Cap is shown in
the same currency as the fundamentals. For definitions of the fields that appear, position your mouse over the field or see
Definitions .
DRSK updates to reflect your changes. Values that you enter in any of the model input fields appear magenta.
6
Note: By default, the Apply Accounting Adjustments setting is applied. This option aims to make firms that finance their
business differently (e.g., lease vs. debt) and pension liabilities comparable. To disable these adjustments, from the toolbar
select Settings > Apply Accounting Adjustments.
3. If you want, you can further your analysis:
• To plot the data in the corresponding chart, click any field.

5 The current monetary value of all outstanding shares stated in the pricing currency. Capitalization is a measure of
corporate size.
6 When checked, indicates that accounting adjustments are applied to ensure comparability across firms, by bringing
off-balance sheet liabilities on to the balance sheet and updating the income statement appropriately.


• To see data transparency, click the transparency icon, then select from the documents that appear in the Data
Transparency window.

RESETTING DEFAULT DATA
You can override any inputs you have made.
To restore the default value for a single field, click the X next to the field.



Note: To restore all default values, enter 90 <GO>. Resetting the value of one field does not reset any other values you have
edited.
The default values appear and data on the screen updates.
HISTORY CHART
You can display a historical timeseries for model input fields you have selected. Depending on your selections, the chart
displays variable trend lines for a specific time range. The history chart displays multiple y-axes to compare trends in different
variables and the x-axis displays dates.
To update the history chart:

1. From the options above the chart, select History.

The charts updates based on your selection.
2. From the top of the chart, select a time range.

3. In the Model Inputs section, click the chart icon(s) for the variables you want to see plotted in the chart.



The History chart updates to reflect your selections.
For definitions of the model input fields, see Definitions .
TERM STRUCTURE CHART

You can display the most recent default probabilities at multiple tenors in the term structure chart. You can see different default
probability parameters as of the current date in annualized or cumulative form.
To update the term structure chart:

1. From the options above the chart, select Term Structure.

The charts updates based on your selection.
2. From the top of the chart, make a selection:
• Cumulative: Metrics reflect increases in effect, size, quantity, etc. by successive additions.

• Annualized: Metrics are adjusted for a 12-month period.



The Term Structure chart updates to reflect your selections.
DEFAULT RISK SCALE

You can access the Bloomberg Default Risk Scale for Bloomberg Risk Scores.
To see default risk scale comparisons:

From the toolbar, select Info > Default Risk Scale.

The Bloomberg Default Risk Scale window appears with comparison data.



The color legend contains the following codes:

• IG (Investment Grade): The highest quality investments, which are indicative of the green Bloomberg default risk.
• HY (High Yield): The mid-level quality investments, which are indicative of the yellow Bloomberg default risk.
• DS (Distressed): The low-level quality investments, which are indicative of the red Bloomberg default risk.
DRSK METHODOLOGIES
You can access more information on DRSK methodologies, including white papers, in the documentation center.
To display methodology information, from the toolbar:

• Select Info > DRSK Public Companies White Paper to display the Bloomberg Credit Default Risk: DRSK <GO>:
Framework, Methodology & Usage document in a PDF.

The Bloomberg Credit Risk DRSK <GO> document appears in the Bloomberg Resource Center. For more information,
see BPS <Help>.
• Select Info > BRAV - Bloomberg Default Risk & Valuation to display the Bloomberg Default Risk & Valuation screen.



The Bloomberg Default Risk & Valuation screen appears.
DRSK CUSTOM DATA

You can upload custom private company data for credit health analysis.
To upload private company data:

1. From the toolbar, click the Upload button.

TheExcel Template window opens.
2. Click the Download Template button.



TheDRSK Uploader template opens in Microsoft® Excel.
Note: For more information on how to use the template's functionality, see the Help tab in the Excel template.
3. From the Input tab in the DRSK Uploader template, update the cells corresponding to each column.

|Hint| To ensure that all inputs are valid and complete, click the Model Inputs Check button to ensure that all inputs are
valid and complete.
4. From your Excel spreadsheet, select the column headers and all of the cells with your data. Then, click the outer edge of
the highlighted area, and drag your cursor to the Excel Template window in DRSK.



Your private company data appears in the Excel Template window.
5. Click the Upload button.

A message appears at the top of the screen indicating that a Bloomberg message will be sent to your BLOOMBERG
PROFESSIONAL® message inbox when processing is complete.
6. From your message inbox via the Message (MSG) function, open the message, then click on the ticker(s) listed in the email
to load them into DRSK.



The ticker(s) are loaded into DRSK for credit health analysis.
DRSK CASE STUDIES

You can access an example case study demonstrating different approaches for measuring credit and evaluating corporate
defaults.
To access the case study:
From the toolbar, select Info > Case Studies.

The Monitoring Risk While Pursuing High Returns White Paper document appears in the Bloomberg Resource Center. For
more information, see BPS <Help>.
SETTINGS
You can save your analysis selections, so they appear as default metrics each time you access DRSK, regardless of which
company you have loaded.
To set your selections as defaults:
From the toolbar, select Settings > Save Settings.



Your defaults are applied.


CALCULATIONS
The following topics provide transparency on how the credit health of a public or private firm is evaluated in DRSK.
PUBLIC FIRM COVERAGE

Public Default Risk (DRSK) is based on the Merton distance-to-default (DD) measure, along with additional economically and
statistically relevant factors. DRSK analyzes normalized financial statements, operating performance, and market information,
without using any subjective inputs. DRSK covers more than 41,000 public firms globally. The following table displays regional
coverage of public firms:
Number of public firms Region
9,100 North America
5,400 Western Europe
22,000 Asia
2,100 East Europe
1,000 Latin America
1,400 Middle East
900 Africa
PRIVATE FIRM COVERAGE

Private Default Risk (DRSK) provides an independent evaluation of a private company's credit health by combining
fundamental data, industry risk, market sentiment and business cycle in a quantitative model calibrated to our extensive private
default database. Currently, Bloomberg covers 53,000 private firms in North America.


DOCUMENTS & VIDEOS

The following documents and videos provide additional information about the Bloomberg Default Risk (DRSK) function and
related functionality.
BROCHURES
Type Title Description
China Credit Risk An introduction to Bloomberg's Credit Default

Risk for Chinese Corporations (DRSK <GO>),
a quantitative default risk model that provides
timely and transparent credit default risk analysis
based on operating fundamentals and equity market
information.
WHITE PAPERS
Recent CDS Model Changes A description of the recent changes to the CDS
model in DRSK.
China Credit Risk A report that describes credit default risk for
Chinese corporations.
Japan Credit Default Risk A report that describes credit default risk for
Japanese corporations.
FACT SHEETS
Bloomberg Default Risk An introduction to the credit health of a company

using Bloomberg's proprietary quantitative
techniques.
VIDEOS


Introduction to DRSK(03:37) Provides an introduction to DRSK, which allows you

to estimate the statistical probability of default for a
firm over a specific future time period.
Understanding Drivers of Credit Risk(02:28) Provides an explanation of the three main drivers of a
credit risk in the DRSK model.
Monitoring Changes in Credit Risk(02:52) Provides an overview of monitoring changes in

the credit risk of your portfolio by performing peer
analysis using the Default Risk Monitor (DRAM)
function.
Generating Investment Ideas(02:38) Provides an overview of generating investment ideas

by comparing market and model CDS risk analysis
and identifying trends over time.
Introductory Video: DRSK and SRSK for Insurance Provides a brief demo showcasing key features
Firms(06:29) and benefits to insurance firms of the Default
Risk (DRSK) and Sovereign Credit Risk (SRSK)
functions. The video demos simple scenario analysis
in DRSK and explains how you can use DRSK to
evaluate the credit risk of individual firms.


LEARN MORE
SCREENING METHODS
DRSK allows different market player types to use various screening methods relevant to their interests to determine the credit
health of a single or list of companies. This section provides example of scenarios where BLOOMBERG PROFESSIONAL®
service users can use DRSK for analysis relevant to their investment decisions. For more information on using DRSK, see
Using DRSK.
INVESTMENT SCREENING
This topic provides information on ways a distressed bond yield buyer, equity portfolio manager, and investment committee at a
bank may use DRSK for relative value investment screening in their workflow.
Buy-side investment screening allows investors to screen a large universe regularly. Users often analyze default risk, using
DRSK outputs such as, Bloomberg's 1 year default probability, Bloomberg's Issuer Default Risk, and Bloomberg's Issuer
Default Risk Implied CDS Spread field. The Bloomberg fields are used in conjunction with valuation metrics, such as EPS,
share price change, profitability, growth, bond yields or OAS in this type of analysis.
• A distressed bond yield buyer monitors companies with deteriorating credit health to spot opportunities. The user then
screens an index or sector to select names for deep dive due diligence.
• An equity mutual fund manager looks for relatively stronger credit health among investment grade names to narrow potential
long candidates.
• An investment committee at an investment bank screens credit risk of a potential buy/sell list.
MONITOR PORTFOLIO CREDIT RISK
This topic provides information on ways a commercial bank and portfolio/asset manager may use DRSK for portfolio credit risk
monitoring in their workflow.
Monitoring portfolio credit risk allows investors to screen portfolio members daily and weekly. A limited list of members is
monitored and users may or may not analyze other metrics beyond Bloomberg fields. Users will analyze DRSK outputs such
as, Bloomberg's 1 year default probability, Bloomberg's Issuer Default Risk, and Bloomberg's Issuer Default Risk Implied CDS
Spread field.
• A commercial bank monitors loan book for credit quality changes.
• A portfolio/asset manager measures credit risk of bond or equity portfolio.
RISK MANAGEMENT
This topic provides information on ways a risk officer at a financial institution and corporate treasurer/CFO may use DRSK for
portfolio credit risk monitoring in their workflow.
Buy-side and sell-side risk management allows investors to screen portfolio members, or a selected company list, regularly.
Users may analyze DRSK outputs, such as Bloomberg's 1 year default probability and Bloomberg's Issuer Default Risk, for only
a static list of names that may be slowly changing at most.
• A risk officer at a financial institution monitors enterprise wide risk of portfolio for economic capital and regulatory capital
calculations.


• A corporate treasurer/CFO estimates credit risk for counter parties, suppliers, and customers.
INDIVIDUAL NAME
This topic provides information on ways a commercial bank and insurance company may use DRSK for a detailed credit
analysis on an individual name.
Detailed credit analysis on an individual name allows investors to analyze an individual name for creditworthiness. Users may
analyze DRSK outputs, such as Bloomberg's 1 year default probability and Bloomberg's Issuer Default Risk. The Bloomberg
fields are used in conjunction with valuation metrics, such as EPS, share price change, profitability, growth, bond yield or
OAS, for only one name.
• A commercial bank determines pre-loan sanction credit quality analysis of applicants to develop a credit score and pricing.
• An insurance company examines insurance buyer's credit quality to underwrite risk.


DEFINITIONS
Term Definition
1-Yr Default Risk The Bloomberg Company Default Risk.
1-Yr Default Prob The probability of the company defaulting over the next one year.
5-Yr CDS Spread The cost of default protection, which is the amount the buyer/seller must pay/receive
over the life of the contract to buy/sell protection. The spread is measured in basis
points (bp). One hundred basis points equal 1%.
5-Yr Market CDS The amount the buyer/seller must pay/receive over the life of the contract in order to
buy/sell protection. The spread is measured in basis points (bp). One hundred basis
points equal 1%.
5-Yr Model CDS The amount the buyer/seller must pay/receive over the life of the contract to buy/sell
protection. The spread is measured in basis points (bp). One hundred basis points
equals 1%.
10 PCTL The tenth percentile in the selected industry.
90 PCTL The ninetieth percentile in the selected industry.
30-day MA (%) Displays the moving average in terms of volatility. The moving average is determined
by averaging the historical volatility over 30 days (i.e., the 30-day moving average
averages the previous 30 days' volatility). The difference between 1-year realized
volatility and the 30-day moving average indicates whether the volatility is trending
upward (if the difference is positive) or downward (if the difference is negative).
Adj CFO (T12M) The trailing 12-month adjusted operating cash flow.
Annualized Allows you to see term structure metrics adjusted for a 12-month period.
Apply Accounting Adjustments When checked, indicates that accounting adjustments are applied to ensure
comparability across firms, by bringing off-balance sheet liabilities on to the balance
sheet and updating the income statement appropriately.
Calc Mode Allows you to adjust the model inputs, so you can see their impacts on the credit health
of the loaded company.
CF Discrepancy Applies to the Industry Comparison tab. Cash Flow Discrepancy = (Cash Flow
Operations - EBITDA) / (Absolute value of EBITDA). This fundamental provides a
measure of the amount of gross cash flow invested in non-capital balance sheet items
as a percentage of earnings. Lower ratios could indicate inflated earnings.
Chg 0.01% The change in input required to cause a 0.01% increase in default likelihood.
Company Applies to the Industry Comparison tab. Displays the actual data points that
correspond to the selected company and indicators.
Country of Domicile Applies to the Industry Comparison tab. Allows you to compare the company against
peers within a specific country.


Term Definition
Cumulative Allows you to see term structure metrics increases in effect, size, quantity, etc. by
successive additions.
Current Ratio Current Ratio = Current assets / current liabilities.
Current Ratio Adjusted Current Ratio Adjusted = Current assets / current liabilities.
"Adjusted" refers to when the reported financial data in both the income statement
and balance sheet are adjusted, which renders the resulting fundamental information
comparable across companies to obtain a true picture of the firm's financial condition
and credit health.
Debt/Equity Applies to the Industry Comparison tab. Total Debt to Total Equity = (Short-Term and
Long-Term Borrowings) / (Total Shareholder's Equity) * 100. Total Shareholders' equity
is calculated using the following formula: Preferred Equity + Minority Interest + Total
Common Equity. Total common equity must exist and cannot be equal to zero.
Debt to Equity Ratio Total Debt to Total Equity = (Short-Term and Long-Term Borrowings) / (Total
Shareholder's Equity) * 100. Total Shareholders' equity is calculated using the following
formula: Preferred Equity + Minority Interest + Total Common Equity. Total common
equity must exist and cannot equal zero.
Debt to Equity Ratio Adjusted Total Debt to Total Equity = (Short-Term and Long-Term Borrowings) / (Total
Shareholder's Equity) * 100. Total Shareholders' equity is calculated using the following
formula: Preferred Equity + Minority Interest + Total Common Equity. Total common
equity must exist and cannot equal zero.
“Adjusted” refers to when the reported financial data in both the income statement
comparable across companies to obtain a true picture of the firm’s financial condition
and credit health
EBITDA EBITDA = revenue – expenses (excluding tax, interest, depreciation, and amortization).
EBITDA Adjusted EBITDA = revenue – expenses (excluding tax, interest, depreciation, and amortization).
comparable across companies in order to obtain a true picture of the firm’s financial
condition and credit health.
EV/EBITDA Displays enterprise value versus earnings before interest, tax, depreciation, and
amortization. EV = (market cap + debt + minority interest + preferred shares) – (total
cash + cash equivalents). EBITDA = revenue – expenses (excluding tax, interest,
depreciation, and amortization).
FCF/Sales Applies to the Industry Comparison tab. (Cash flow from operating activities - total
capital expenditures) / revenue received from sales/service. Capital expenditures is the
amount the company spent on purchases of tangible fixed assets.
Fundamentals In the Industry Comparison tab. Displays the corresponding economic indicators,
which are defined in this section.


Term Definition
In the Issuer Default Risk tab. Allows you to override Fundamentals values to see how
your assumptions affect the Model section of the Bloomberg Default Risk screen.
Fundamental values are as of last quarterly filing.
Fundamentals (P) Applies to the Issuer Default Risk tab. The preliminary release of fundamentals flag.
Immediately following an earnings release, this flag activates if the earnings release did
not include full disclosure of both an income statement and a balance sheet. When
balance sheets are not fully disclosed, Bloomberg infers the missing numbers based on
historical values.
Under such conditions, the flag warns you that the model output is based on
incomplete information and should be treated as preliminary.
Hist. 1-Yr Volatility The volatility of the underlying security, which is the standard deviation of percentage
price changes in the last year using only the closing price.
Implied (1-Yr) (%) Applies to the Industry Comparison tab. Displays the volatility as implied by listed
option prices over the next year.
Industry Average Methodology Applies to the Industry Comparison tab. Allows you to select an industry group and
industry average methodology (i.e., median and mean). Median is the middle value in a
range of values. A mean is a simple average of a group of values.
Industry Group Allows DRSK users to compare the company against peers within a specific industry.
Industry (Mean or Median) Applies to the Industry Comparison tab. Displays the industry mean or median value
that corresponds to the indicators, depending on your selection in the Industry Average
Methodology field at the top of the screen. Median is the middle value in a range of
values. A mean is a simple average of a group of values.
Industry Range A visual dispersion of firm, industry median, and weighted average values relative to
each other and the 10th and 90th percentiles of the industry distribution.
Interest Coverage Generally, how many times interest expenses can be paid with earnings. Calculated as:
EBIT / Interest Expense.
Interest Coverage Ratio Applies to the Chart section. The ratio of interest expense to EBIT (usually). Calculated
as: ((Net income / [1 - (effective tax rate / 100)]) + total interest expenses)
Interest Expn (T12M) The amortization of debt discount or premium, debt issuance expenses, and factoring
expenses from the trailing 12 months. Interest expense is an expense related to
borrowed money.
Interest Expense Applies to the Chart section. The amortization of debt discount or premium, debt
issuance expenses, and factoring expenses from the last quarterly filing. Interest
expense is an expense related to borrowed money.
Libor 3m The three-month interest rate.
Likelihood of Default The one-year company default probability.
Long-Term Debt The long-term debt from the last quarterly filing. Long-term debt is paid in excess of
one year and includes all interest-bearing financial obligations that are not current.
Types of long-term debt include convertible, redeemable, retractable debentures,


Term Definition
bonds, loans, mortgage debts, sinking funds, long-term bank overdrafts, and capital
(finance) lease obligations.
L.T. Debt Applies to the Chart section. The long-term debt from the last quarterly filing.
Long-term debt is paid in excess of one year and includes all interest-bearing
financial obligations that are not current. Types of long-term debt include convertible,
redeemable, retractable debentures, bonds, loans, mortgage debts, sinking funds,
long-term bank overdrafts, and capital (finance) lease obligations.
L.T. Debt Adjusted Applies to the Chart section. The long-term debt from the last quarterly filing.
Long-term debt is paid in excess of one year and includes all interest-bearing financial
obligations that are not current. Types of long-term debut include convertible,
redeemable, retractable debentures, bonds, loans, mortgage debts, sinking funds,
long-term bank overdrafts, and capital (finance) lease obligations.
and credit health.
Market Cap The current monetary value of all outstanding shares stated in the pricing currency.
Capitalization is a measure of corporate size.
Market Data Allows you to override Market Data values to see how your assumptions adjust the
Model section of the Bloomberg Default Risk. The Market Data values are as of last
close.
Mean The simple average of a group of values on the Industry Comparison tab.
Median The middle value in a range of values on the Industry Comparison tab.
P Preliminary Release of Fundamentals: A corporate action indicator that appears next
to the Fundamentals inputs in the lower left of the Issuer Default Risk tab. Immediately
following an earnings release, this indicator activates if the earnings release did
not include full disclosure of both an income statement and balance sheet. When
financial statements are not fully disclosed, Bloomberg infers the missing numbers
based on historical values. Under such conditions, the indicator warns you that the
model-intrinsic price is based on incomplete information and should be treated as
preliminary.
Period In the Chart section, allows you to choose the timeframe over which you want to
compare two values.
P/E Displays the price to earnings ratio, which is: PE = market value per share / earnings
per share (EPS).
Price Vol (1-Yr) The volatility of the underlying security, which is the standard deviation of percentage
price changes in the last year using only the closing price.
Quick Ratio Applies to the Industry Comparison tab and the Chart section. A measure of
short-term liquidity (the ratio of liquid assets to short-term liabilities). Calculated as:


Term Definition
liquid assets / current liabilities. Liquid assets = cash and near cash items + marketable
securities and short-term investments + accounts receivable and notes receivable.
Quick Ratio Adjusted Applies to the Chart section. Quick Ratio Adjusted = Liquid assets / current liabilities.
Liquid assets = cash and near cash items + marketable securities and short-term
investments + accounts receivable and notes receivable.
and credit health.
Range Displays the median and weighted average credit values of companies in that sector.
The blue dot represents the loaded company.
Realized (1-Yr) (%) Applies to the Industry Comparison tab. Displays the variability in stock prices over
the past one year. Volatility is the standard deviation of day to day logarithmic price
changes. A 260-day price volatility equals the annualized standard deviation of relative
price change of the 260 most recent trading days' closing price, expressed as a
percentage for the day prior to the current day.
Region-Sector Allows you to choose related industry sectors for comparison and compare related
companies in different geographic regions.
Selected Industry In the Industry Comparison tab, allows you to choose which industry group to compare
to the loaded security.
Share Price The overnight closing price. Note that DRSK supports both American (USD) and
Canadian (CAD) currencies.
Short-Term Debt The short-term debt from the last quarterly filing. Short-term debt is typically paid
in under one year and includes bank overdrafts, short-term debts and borrowings,
repurchase agreements (repos) and reverse repos, the short-term portion of long-term
borrowings, current obligations under capital (finance) leases trust receipts, bills
payable, bankers acceptances, and the current portion of hire purchase creditors.
SPX Index Applies to the Chart section. The S&P 500 Index.
S.T. Debt The short-term debt from the last quarterly filing. Short-term debt is typically paid
S.T. Debt Adjusted The short-term debt from the last quarterly filing. Short-term debt is typically paid


Term Definition
and credit health.
Total Debt Applies to the Chart section. Total Debt = Short-Term Debt + Long-Term Debt.
VIX Index Applies to the Chart section. The Chicago Board Options Exchange Volatility Index
(CBOE). This index measures the volatility of the S&P 500 Index.
Wtd Avg The weighted average in the selected industry. This average is weighted by trailing
12-month net sales.
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Bloomberg Default: Risk (DRSK)

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Bloomberg Default: Risk (DRSK)

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>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>BLOOMBERG DEFAULT RISK (DRSK)

Bloomberg's commitment to reducing our environmental

This document was prepared for the exclusive use of

WHAT IS BLOOMBERG DEFAULT RISK (DRSK)?

DOCUMENTS & VIDEOS 20

WHAT IS BLOOMBERG DEFAULT

ISSUER DEFAULT RISK

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• For a breakdown of this section, see Issuer Default Risk.

CODE OF CONDUCT DISCLOSURE

To read the complete disclosure, see Code of Conduct Disclosure.

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The security loads with the corresponding data in DRSK.

ISSUER DEFAULT RISK

For an overview of this section, see Issuer Default Risk .

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For an overview of this section, see Sector Comparison.

1 The Bloomberg Company Default Risk.

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The Sector Comparison section is divided into the following sections:

UPDATING MODEL INPUTS

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RESETTING DEFAULT DATA

You can override any inputs you have made.

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The default values appear and data on the screen updates.

To update the history chart:

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For definitions of the model input fields, see Definitions .

TERM STRUCTURE CHART

To update the term structure chart:

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DEFAULT RISK SCALE

To see default risk scale comparisons:

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The color legend contains the following codes:

To display methodology information, from the toolbar:

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The Bloomberg Default Risk & Valuation screen appears.

DRSK CUSTOM DATA

To upload private company data:

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DRSK CASE STUDIES

To access the case study:

From the toolbar, select Info > Case Studies.

To set your selections as defaults:

From the toolbar, select Settings > Save Settings.

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Your defaults are applied.

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PUBLIC FIRM COVERAGE

Number of public ﬁrms Region

9,100 North America

5,400 Western Europe

2,100 East Europe

1,000 Latin America

1,400 Middle East

PRIVATE FIRM COVERAGE

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DOCUMENTS & VIDEOS