In this approach, the value of the firm’s assets and its capital structure are not modeled at all, and the credit events are specified in terms of some exogenously specified jump process (as a rule, the recovery rates at default are also given exogenously). We can distinguish between between the reduced-form models that are only concerned with the modelling of default time, and that are henceforth referred to as intensity-based-models, and the reduced form models with migrations between credit rating classes, called the credit migration models.
[ref]Tomasz. R. Bielecki, Marek Rutkowski. Credit Risk – Modeling Valuation and Hedging [/ref]