Wealth transfer effects between stockholders and bondholders on the announcement date of changes in a firm's credit rating have primarily been examined a) for one type of security; b) on US capital markets; and c) by applying standard event study methods. In contrast to these investigations, we...

State guarantees are supposed to have positive influence on banks' ratings as they provide an additional safety net to depositors while lending the guarantor's creditworthiness to the bank. Based hereupon, we research if and to what extend guarantees perceptibly affect market prices of...