Assessing Credit Risk with Structural Models

In the context of fixed income securities, a structural credit model is employed to assess the probability of default for a firm based on its asset value dynamics. This method typically uses the relationship between asset values and liabilities to estimate the likelihood of default.

Consider a company called TechCo, which has total assets currently valued at $500 million, with liabilities of $300 million. According to a structural credit model, if the asset value decreases to $250 million, what is the likely outcome regarding TechCo's credit risk?