Tiebreaker: Certification and Multiple Credit Ratings

Dion Bongaerts, K.J. Martijn Cremers and William Goetzmann

No 15331, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper explores the economic role credit rating agencies play in the corporate bond market. We consider three existing theories about multiple ratings: information production, rating shopping and regulatory certification. Using differences in rating composition, default prediction and credit spread changes, our evidence only supports regulatory certification. Marginal, additional credit ratings are more likely to occur because of, and seem to matter primarily for regulatory purposes, but do not seem to provide significant additional information related to credit quality.

JEL-codes: G12 G14 G24 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-cta
Note: CF
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Citations: View citations in EconPapers (2)

Published as Dion Bongaerts & K. J. Martijn Cremers & William N. Goetzmann, 2012. "Tiebreaker: Certification and Multiple Credit Ratings," Journal of Finance, American Finance Association, vol. 67(1), pages 113-152, 02.

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Journal Article: Tiebreaker: Certification and Multiple Credit Ratings (2012)
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