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Retail bond investors and credit ratings

Journal of Accounting and Economics, 2021
Using comprehensive data on U.S. corporate bond trades since 2002, we find that retail bond investors over-rely on untimely credit ratings, neglect firm fundamentals, and appear to misunderstand the trade-off between bond risk and yields. Specifically, retail investors appear to select bonds by first screening on a credit rating level and then sorting ...
Ed deHaan, Jiacui Li, Edward M. Watts
openaire   +1 more source

Credit Rating Agencies, Information Asymmetry and Us Bond Liquidity

SSRN Electronic Journal, 2022
AbstractDo rating announcements reduce information asymmetries? We investigate the effect of rating disclosures on the volatility and liquidity of the US bond market. Although rating agencies' decisions are often anticipated by credit spread changes, we show that in the case of no regulatory change, their release can reduce volatility and the bid–ask ...
Stefano Lovo   +2 more
openaire   +1 more source

Credit enhancement and bond rating

China Finance Review International, 2017
Purpose The purpose of this paper is to examine the difference of credit enhancement of variously secured bonds issued by local government financing platform bond (LGFPB). Design/methodology/approach The approaches to secure the bonds usually include mortgage, collateral, guarantee, etc.
Yiming Hu, Ying Yang, Pengfei Han
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Environmental inefficiency and bond credit rating

Journal of Economics and Business, 2019
Abstract This study examines the impact of a firm’s polluting activities (measured as environmental inefficiency) on the firm’s bond credit rating. We posit that firms with excessive polluting activities (i.e., a high level of environmental inefficiency) receive low bond ratings because prior research links pollution reduction to better firm ...
Brian Chabowski   +3 more
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Assessment of Credit Ratings and Credit Risk Models on Public Bonds

The Journal of Fixed Income, 2021
The authors investigate the performance of two different credit risk models, the credit ratings of SP (2) bond ratings of financial firms are higher than those of non-financials, but financial firms pay a higher cost of debt than non-financial firms; (3) SP and (4) financial firms are less likely to default than non-financial firms. TOPICS:Credit risk
Karyl B. Leggio   +2 more
openaire   +1 more source

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