Financial adjustments and credit rating changes

Kristopher J. Kemper

Finance Research Letters, 2020, vol. 33, issue C

Abstract: Credit ratings are examined from a firm's perspective in terms of the financial changes that are associated with changes in credit ratings. While previous papers in this field generally focus on market reactions, this study instead looks at firm reactions. After first taking a snapshot of the static financials associated with ratings changes, changes in financial positions associated with ratings changes are also studied. Further, this paper investigates financial changes in the year following a downgrade in an effort to learn more about the validity of firms making balance sheet adjustments in an effort to recover lost ratings.

Keywords: Credit ratings; Capital structure (search for similar items in EconPapers)
JEL-codes: D82 G24 G32 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:33:y:2020:i:c:s1544612318302253

DOI: 10.1016/j.frl.2019.06.011

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