Credit Risk Management Framework for Corporate Bonds

As a portfolio manager at a mid-sized investment firm, you are tasked with evaluating the credit risk associated with a particular corporate bond your firm is considering adding to its portfolio. The bond has a credit rating of BB and is issued by a company in the retail sector, which has seen fluctuating earnings due to changes in consumer behavior during economic shifts.

Your challenge is to outline a robust credit risk management framework that would help in assessing the credit risk of this bond and in monitoring it after purchase. Discuss the key components of this framework, including quantitative and qualitative factors, and the methodologies you would use to assess the creditworthiness of the issuer.