Tiebreaker : Certification and Multiple Credit Ratings ∗

@inproceedings{BONGAERTS2011TiebreakerC,
  title={Tiebreaker : Certification and Multiple Credit Ratings ∗},
  author={DION BONGAERTS and K. J. MARTIJN CREMERS and William Goetzmann},
  year={2011}
}
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… CONTINUE READING
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