**Nothing stops us from running the Merton at both T = 1.0 and (eg) T = 5.0 years.**

Of course, if Merton gives us a 5-year cumulative PD, we can receive the 5-year PD estimate given by Merton, assume it to be a 5-year cumulative PD (which is an approximation and technically confuses the Merton output with a cumulative PD) and further assume constant annual conditional PD, and then use: 1-year conditional PD = 1 - (1- 5yr PD)^(1/5). Or for that matter, we can infer a hazard rate = LN(1 - 5 yr cum)*-1/T. So, we have can resort to our usual mechanics, but we've left the Merton to do that. Thanks,