This paper examines the use cases for Credit Benchmark’s Consensus Probabilities of Default (Consensus PDs), in the context of more established indicators of Sovereign Default Risk. We suggest that Consensus PDs, as an additional dataset that is both robust and broad, can play a valuable role in compensating for low signal-to-noise in other metrics. It can also provide a basis on which to fill coverage gaps in indicators such as CDS and bond yields, and offer an alternative form of beta metric at the portfolio level.
