Evaluating Credit Risk in Corporate Bond Portfolios

As a portfolio manager for a high-net-worth individual, you are tasked with evaluating the credit risk of various investment options. A significant portion of the client's portfolio is allocated to corporate bonds, and you need to assess how changes in credit quality can impact overall portfolio risk.

Discuss the methods you would use to evaluate credit risk in this portfolio. Include a description of quantitative and qualitative approaches, the tools for risk assessment, and how you would implement a risk management plan to mitigate potential credit risk. Finally, explain how you would communicate these risks and your risk management strategy to the client.