Ratings under scrutiny

According to a report of the Neue Zürcher Zeitung, bond issuers underline the importance of larger competition in the rating business. In a survey made by the Bond Market Association 41 bond issuers confirmed that the lack of competition was an important issue for the rating branch. 42% of the surveyed investors shared this opinion. Furthermore:

90% of the issuers indicated that ratings agencies such as Moody’s, Standard and Poor’s and Fitch Ratings would support them in the aim to gain a better access to the capital markets and also to reduce their issuing costs.
85% of the issuers indicated that they were content with two ratings, while 15% considered three independent ratings as necessary. 61% of the investors indicated they would prefer to invest in bonds with three ratings.

The survey also indicated that issuers preferred Moody’s rating to the ratings by Standard and Poor’s. However, investors showed a preference for S&P and Fitch ratings. This survey was made by the Bond Market Association, which is based in UK and the USA, together with the US Association of Corporate Treasures.


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