Credit risk on the bond market

Credit risk is a significant Feature of debt securities. Large institutiona l investors employ teams of researchers who scrutinize and measure credit r isk. The Czech market possesses specific features that make the exact speci fication and measurement of credit risk an uneasy task. This article identi fies obstacles in the research process that any researcher has to deal with in this regard. The analysis of the credit spread of Czech corporate bonds provides some empirical evidence to theoretical assumptions derived from f oreign research. The time structure of credit spread is also examined. A lo wer relevance of the results of the analysis is discussed afterward.