CREDIT
Loss Given Default
Measures the proportion of exposure lost if default occurs.
Formula
LGD = 1 - Recovery rate
Variables: Recovery rate
What it means
Measures the proportion of exposure lost if default occurs.
Example
A 45% recovery rate corresponds to a 55% LGD.
How to interpret it
This concept should be read together with its market convention, measurement horizon and underlying instrument. BondStats presents it as an analytical reference rather than investment advice; instrument documentation and primary market rules remain authoritative.
Related Formulas
BondStats reference content is independently written. Mathematical relationships, abbreviations and market conventions are presented for educational and analytical use.