Sovereign Ceilings “Lite”? The Impact of Sovereign Ratings on Corporate Ratings

Eduardo Borensztein, Kevin Cowan and Patricio Valenzuela

No 299, Documentos de Trabajo from Centro de Economía Aplicada, Universidad de Chile

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.

Date: 2013
New Economics Papers: this item is included in nep-spo
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Citations: View citations in EconPapers (94)

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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:edj:ceauch:299

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