# NYU Stern Finance Professor Edward Altman Develops Z-Metrics Credit Analysis Tool 1 Press Releases March 18, 2010 ![](/sites/default/files/styles/246w/public/assets/images/uat_024818.gif?itok=vyb0e6SV)> *– Investors and Lenders Can Now More Accurately Estimate Company Credit Ratings and Default Risk Probabilities –* Z-Score creator and the world’s leading bankruptcy and distressed debt expert NYU Stern Professor [Edward I. Altman](http://w4.stern.nyu.edu/faculty/bio/edward-altman) has co-developed the Z-Metrics™ credit analysis tool to enable investors and lenders to more accurately estimate company credit ratings and default risk probabilities. Using 15 “ratings” categories ranging from the highest quality “ZA+” rating to the lowest quality “ZF-” rating, the Z-Metrics model evaluates the credit-worthiness of non-financial enterprises. The rating categories are based on a firm’s probability of default for one- and five-year horizons. “High default rates on U.S., Canadian and European high-yield bonds and leveraged loans over the past five years indicate the continuous need for credit institutions and other investors to carefully monitor the financial outlook and credit-worthiness of industrial and financial enterprises,” said Professor Altman, the Max L. Heine Professor of [Finance](/experience-stern/about/departments-centers-initiatives/academic-departments/finance) at NYU Stern School of Business, and the Director of Research in Credit and Debt Markets at the [NYU Stern Salomon Center for the Study of Financial Institutions](/experience-stern/about/departments-centers-initiatives/centers-of-research/salomon-center-for-the-study-of-financial-institutions). “Z-Metrics will offer investors, lenders and regulators a robust, independent alternative to assess default probabilities and measure credit risk.” An international expert on corporate bankruptcy, high-yield bonds, distressed debt and credit risk, Professor Altman is well-known for creating his respected Z-Score method for assessing the financial health of companies and their risk of bankruptcy. Working as a consultant to RiskMetrics Group Inc., a provider of risk management and corporate governance products and services to participants in the global financial markets, he developed the Z-Metrics tool in partnership with the company as well as with Dr. Herbert Rijken of the Vrije University of Amsterdam. To learn more about Z-Metrics, visit: .