1311 Corporate Debt O Debt has the unique feature of allowing the borrowers to walk away from their obligation to pay, in exchange for the assets of the company dEfault risk"' is the term used to describe the likelihood that a firm will walk away from its obligation, either voluntarily or involuntarily o Bond ratings are issued on debt instruments to help investors assess the default risk of a firm Irwin/McGraw-Hill CThe McGraw-Hill Companies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 13- 11 Irwin/McGraw-Hill Corporate Debt Debt has the unique feature of allowing the borrowers to walk away from their obligation to pay, in exchange for the assets of the company. “Default Risk” is the term used to describe the likelihood that a firm will walk away from its obligation, either voluntarily or involuntarily.  “Bond Ratings”are issued on debt instruments to help investors assess the default risk of a firm