Credit rating agencies emphasize the importance of specific financial ratio thresholds in their rating process. Firms below these thresholds are more likely to receive higher ratings than similar firms that are not. I show that firms near key Debt/EBITDA thresholds are significantly more likely...

As opposed to the public debt market, the ultimate users of bank loan ratings, lenders, may prefer inflated ratings to reduce their risk-weighted assets. By exploiting variation in borrower information asymmetry, and thus rating agencies' ability to acquiesce to lender demands, we provide...

We examine whether a firm's debt maturity structure affects its credit quality. Consistent with theory, we find that firms with greater exposure to rollover risk (measured by the amount of long-term debt payable within a year relative to assets) have lower credit quality; long-term bonds issued...