Skip to main content
padlock icon - secure page this page is secure

Determining the Probability of Default and Risk-Rating Class for Loans in the Seventh Farm Credit District Portfolio

Buy Article:

$52.00 + tax (Refund Policy)

Credit risk is the primary risk facing financial institutions. With the proposed guidelines under the New Basel Accord, financial institutions will benefit from better assessing their risks. The probability of default (PD) and risk-rating class is studied for 157,853 loans in the Seventh Farm Credit District Portfolio. Repayment capacity, owner equity, and working capital origination loans are important determinants of the PD. Standard & Poor's (S&P) reported probabilities of default were used to classify each of the loans into a risk-rating class. The average predicted PD is 1.61%, which would fall into the BB− S&P class.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Document Type: Research Article

Affiliations: 1: Allen M. Featherstone is a professor of Agricultural Economics at Kansas State University. 2: Laura M. Roessler is a master of Agribusiness graduate student at Kansas State University. 3: Peter J. Barry is a professor of Agricultural Economics at the University of Illinois.

Publication date: March 1, 2006

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more