The roles of rating outlooks: the predictor of creditworthiness and the monitor of recovery efforts

Autor:	Jianfu Shen, Winnie P. H. Poon
Rok vydání:	2020
Předmět:	050208 finance Actuarial science 05 social sciences Sample (statistics) 050201 accounting General Business Management and Accounting Corporate finance Credit rating Issuer Accounting 0502 economics and business Business Finance Credit risk
Zdroj:	Review of Quantitative Finance and Accounting. 55:1063-1091
ISSN:	1573-7179 0924-865X
DOI:	10.1007/s11156-019-00868-7
Popis:	Using a comprehensive U.S. rating sample from S&P between 1981 and 2015, we examine the information content, responsiveness to credit risk and recovery efforts associated with rating outlooks. We find that rating outlooks (and credit watches) have important information content and are significantly associated with creditworthiness, measured by expected default frequency. More importantly, we show that by assigning negative outlooks, credit rating agencies induce some issuers to exert recovery efforts to prevent subsequent downgrades. The findings support the theoretical prediction of Boot et al. (Rev Financ Stud 19(1):81–118, 2006) that credit rating actions serve as a coordination mechanism between rating agencies and issuers.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::7fdb077e288200cbcb33ee997d2a3790 https://doi.org/10.1007/s11156-019-00868-7 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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