- The first table covers yesterday close yields on generic IRL bonds by maturity
- The second estimates probability of default, using, as risk-free rates German yields on comparable paper
Basically, there is a 90% chance of a default (20% haircut) within 10 years and 15% chance of such an event within the year.The estimates are very much approximate as we use only yields.
3 comments:
interesting times we live in. Personally I think the quicker that Ireland restructures the debt burden the sooner they can have a meaningful recovery.However having said that the US job numbers are looking strong and the world economy may come to the rescue.The housing is another matter completely a nightmare that has not even begun its corrective phase. Education costs money and Ireland has had its first boom and bust cycle I hope there are many more to come its an unfortunate but necessary part of capitalism..
Constantin,
I realise your probabilitioes are approximate. But can you outline or link to the method of calculation?
Hi can you let us know the IRL bond yields at each year and the coupon payments if applicable
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