This gives a probability - based
value to a bond, usually quite different than traditional «yield - to -
maturity» and industry «rule - of thumb»
formulas.
To keep tabs on assets that may be facing a higher than usual risk of default, Morningstar Credit Ratings, a Nationally Recognized Statistical Ratings Organization (NRSRO), follows a special
formula that takes into account the assets» debt service coverage ratios, loan - to -
value ratios, occupancy levels,
maturity dates, tenant rollover expectations within a 12 - month period and the overall leasing conditions in the assets» metropolitan area.