Public Disservice: the Negative Impact of Credit Ratings on US Municipal Bond Issuers

2015 ◽  
Author(s):  
Marc D. Joffe
Keyword(s):  
Negative Impact ◽  
Credit Ratings ◽  
Municipal Bond ◽  
Bond Issuers

Abstract--Municipal Bond Credit Ratings: A Suggested Methodology

1974 ◽  
Vol 9 (5) ◽  
pp. 897 ◽  
Author(s):  
Ronald Forbes ◽  
Alan Frankle ◽  
Arthur Hierl
Keyword(s):  
Credit Ratings ◽  
Municipal Bond

scholarly journals Municipal Bond Ratings: Are They Worthwhile for Rural Governments?

1982 ◽  
Vol 11 (1) ◽  
pp. 67-73
Author(s):  
Patrick J. Sullivan
Keyword(s):  
Credit Ratings ◽  
Municipal Bond ◽  
Bond Ratings ◽  
General Obligation Bonds ◽  
General Obligation

Rural governments in the Northeast purchased credit ratinqs for a high percentage of their general obligation bonds sold in 1977. This paper examines the effect credit ratings had on the interest cost of GO bonds sold by nonmetro governments in the Northeast. The results suggest that the decision to purchase a rating may be a costly error under certain circumstances.

Do Bond Issuers Shop for Favorable Credit Ratings?

2020 ◽  
Vol 66 (12) ◽  
pp. 5944-5968 ◽  
Author(s):  
Mathias Kronlund
Keyword(s):  
Credit Ratings ◽  
Theoretical Models ◽  
Bond Market ◽  
Corporate Bond ◽  
Corporate Bond Market ◽  
Bond Issuers ◽  
Biased Ratings

This paper provides evidence of ratings shopping in the corporate bond market. By estimating systematic differences in agencies’ biases about any given firm’s bonds, I show that new bonds are more likely to be rated by agencies that are positively biased toward the firm—a pattern that is strongest among bonds that have only one rating. The paper also shows that issuers often delay less favorable ratings until after a bond is sold. Consistent with theoretical models of ratings shopping, these effects are strongest among more complex bonds that are more difficult to rate. Bonds with upward-biased ratings are more likely to be downgraded and default, but investors account for this bias and demand higher yields when buying these bonds. This paper was accepted by Gustavo Manso, finance.

Predicting Credit Ratings with a GA-MLP Hybrid

2006 ◽  
pp. 220-238 ◽  
Author(s):  
Robert Perkins ◽  
Anthony Brabazon
Keyword(s):  
Genetic Algorithm ◽  
Evolutionary Algorithm ◽  
Credit Ratings ◽  
Corporate Bond ◽  
Practical Application ◽  
Bond Issuers

The practical application of MLPs can be time-consuming due to the requirement for substantial modeler intervention in order to select appropriate inputs and parameters for the MLP. This chapter provides an example of how elements of the task of constructing a MLP can be automated by means of an evolutionary algorithm. A MLP whose inputs and structure are automatically selected using a genetic algorithm (GA) is developed for the purpose of predicting corporate bond-issuer ratings. The results suggest that the developed model can accurately predict the credit ratings assigned to bond issuers.

Complex Systems, Competition/Antitrust, and Legal Problems in the Global Credit Rating Agency Industry

2021 ◽  
pp. 252-282
Keyword(s):  
Complex Systems ◽  
Social Welfare ◽  
Credit Rating ◽  
Credit Ratings ◽  
Credit Rating Agency ◽  
Rating Agency ◽  
Legal Problems ◽  
Bond Issuers ◽  
Reputational Capital

This chapter explains how the tie-breaker effect reduces social welfare and distorts equilibria. This chapter introduces new definitions of “equilibrium” in the CRA ratings processes. (This has been one of the major missing elements in the existing literature on the credit ratings industry) It explains why “reputational capital” (of CRAs) is a sub-set of “influence” (which can have more impact on bond-issuers' decisions and investors' decisions than traditional “influence”) and critiques the games theorems in Virag and other important papers.

scholarly journals PENGARUH STRUKTUR UTANG, PERINGKAT KREDIT, DAN STRUKTUR MODAL TERHADAP IMBAL JASA AUDIT

2020 ◽  
Vol 28 (2) ◽  
pp. 84
Author(s):  
Adi Darmawan Ervanto ◽  
Andry Irwanto
Keyword(s):  
Capital Structure ◽  
Credit Rating ◽  
Negative Impact ◽  
Stock Exchange ◽  
Credit Ratings ◽  
Audit Fees ◽  
Risk Governance ◽  
Short Term ◽  
Natural Logarithm ◽  
Audit Fee

Introduction: The purpose of this study is to empirically examine any effect of short-term debt structure, credit ratings, and capital structure on the audit fee. The sample used in this study are the companies listed in the PT Pemeringkat Efek Indonesia (Pefindo) and the Indonesia Stock Exchange. Methods: Data were analyzed using linear regression.The independent variables in this study are the proportion of short-term debt, credit ratings, and capital structure. Dependent variable is audit fee. This research uses the control variables representing firm size, its complexity, and risk. Number of assets and current assets to total assets ratio represent the size of the company. Number of business segments and the proportion of export sales to total sales represent the complexity of the company. Risk represented by the ratio of short-term liabilities to total assets, short-term liabilities to total assets ratio, quick ratio, and return on assets. Results: Hypothesis testing shows that the proportion of short-term debt does not significantly influence audit fee. Ratings have a negative impact on the audit fees of listed companies in Indonesia's credit rating. Capital structure does not significantly influence audit fee. Conclusion and suggestion: This study has limitations that are audit fee is measured by the natural logarithm of the nominal value of professional fees expense presented in the financial statements of the company and there is a possibility of mediating variables such as risk governance and audit, in examining impact of the proportion of debt and capital structure on audit fee.

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