Baghai, Ramin; Servaes, Henri; Tamayo, Ane - C.E.P.R. Discussion Papers - 2011
We document that rating agencies have become more conservative in assigning ratings to corporate bonds over the period 1985 to 2009. Holding firm characteristics constant, average ratings have dropped by 3 notches (e.g., from A+ to BBB+) over time. This increased stringency has affected both...