Sovereign Ceilings "Lite"? The Impact of Sovereign Ratings on Corporate Ratings

Eduardo Borensztein, Kevin Cowan and Patricio Valenzuela
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Eduardo Borensztein: Inter-American Development Bank
Kevin Cowan: Central Bank of Chile

Working Papers from University of Pennsylvania, Wharton School, Weiss Center

Abstract: Although credit rating agencies have gradually moved away from a policy of never rating a corporation above the sovereign (the 'sovereign ceiling'), it appears that sovereign credit ratings remain a significant determinant of corporate credit ratings. We examine this link using data for advanced and emerging economies over the period of 1995-2009. Our main result is that a sovereign ceiling continues to affect the rating of corporations. This effect is robust to a broad range of alternative specifications.

JEL-codes: G10 G20 G30 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (78)

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Related works:
Journal Article: Sovereign ceilings “lite”? The impact of sovereign ratings on corporate ratings (2013)
Working Paper: Sovereign Ceilings “Lite”? The Impact of Sovereign Ratings on Corporate Ratings (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:upafin:13-11

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