This paper investigates whether credit ratings incorporate business linkages along the supply chain. We first document that a supplier's bankruptcy risk is significantly associated with its major customer's bankruptcy risk, thereby leading to a positive association between the credit ratings of...

We show that a rating agency can provide certification for corporate borrowers through the mechanism of a credit watch with direction downgrade. We find that firms with watch-preceded rating confirmations (firms for which original ratings are confirmed after a credit watch warning) experience an...

In this paper, we use credit rating data from two large Swedish banks to elicit evidence on banks' loan monitoring ability. For these banks, our tests reveal that banks' internal credit ratings indeed include valuable private information from monitoring, as theory suggests. Banks' private...

This paper analyzes the informational content of 3,365 Moody's credit rating reports, such as rating changes, watchlist announcements, and outlooks, and their impact on financial markets. We test whether the tone or the length of credit rating report have an immediate impact on the equity or...

This study develops and evaluates a model that generates synthetic credit ratings using accounting and market based information. The model performs very well in explaining agency ratings, suggesting that fitted values for unrated companies are likely to be reasonably precise. In addition, the...

Objective: The objective of the article is to investigate two issues. First, whether the Islamic bond (sukuk) ratings are the key determinant in affecting stock returns and, second, whether firm-characteristic variables moderate the sukuk ratings effect on stock returns. Research Design &...

This paper examines the issues of the aggregation and comparison of the credit ratings of various economic agents for risk management purposes in a commercial bank. The empirical results of the study make it possible to increase the assessment of credit risks based on the constructed system of...

In this paper, we examine the impact of credit rating changes on the financing decisions of overconfident CFOs. We find that CFO overconfidence significantly increases the sensitivity of net debt issuances to the rating changes, particularly when firms have no access to low-risk debt....

Partisan perception affects the actions of professionals in the financial sector. Linking credit rating analysts to party affiliations from voter records, we show that analysts who are not affiliated with the U.S. president's party downward-adjust corporate credit ratings more frequently. Since...

The paper models and analyses the dynamics of credit spread curves based on ratings over the period from 2004 to 2021. Using more than 1.5 million data points of individual bonds, instead of using index data, monthly asset swap spread (ASW) curves are constructed for all rating levels. The paper...