Transition matrix and PD

[dlrm]

In BT's pdf "Brian Nocco and René Stulz, “Enterprise RiskManagement: Theory and Practice” is example with transition matrix, and at page 4 there is statement "Given an optimal target rating of ‘A,’ the firm discerns this rating will be achieved if itsprobability of default is 0.08%."

Could you explain why PD is 0.08% ?
(From table 0.08% is just probability of migrating from A to Aaa, but not PD)

 

[dlrm]

Oh, now I see, default probability for A is 0.08% too, sorry ))

Question is closed

 

[David Harper CFA FRM]

@dlrm glad you saw that!