Bond Ratings Research Articles

ANALISIS STRATEGI LIKUIDITAS, KUPON, MATURITY DAN RATING OBLIGASI DALAM MENCEGAH GAGAL BAYAR OBLIGASI EVERGRANDE

The second largest property company from the Bamboo Curtain country, the Evergrande Company, experienced an inflated debt worth USD 300 billion which also made it one of the companies that almost defaulted on the bonds issued. It is feared that this phenomenon will have a negative impact on similar companies. The purpose of this study was to analyze the Liquidity Strategy, Coupon, Maturity and Bond Rating in Preventing Default of Evergrande Bonds. Strategy analysis using SWOT analysis. In this study, the researcher used a qualitative descriptive approach. Based on the SWOT analysis, it was found that the financial and non-financial management activities of Evergrande's company were considered bad, thus placing the company in a position of liquidity difficulty, as a result, the company chose to pay off its bonds debt by issuing new bonds until finally the three of red policy emerged, making Evergrande difficult to pay its maturing bonds.

Risk analysis in social housing delivery: A public–private partnerships approach

AbstractFaced with fiscal pressure and concerns over bureaucratic inefficiency, policymakers at Australia's state government level are evaluating instruments to improve social housing services. A public–private partnerships (PPPs) procurement approach is one such instrument for increasing housing supply to address housing affordability in Australia. To determine the value of pursuing a project through a PPP delivery versus a traditional procurement approach, public administrators need to determine discount rates for comparing different cash flows streams on a consistent basis. Additionally, they must estimate public sector comparator (PSC) to determine public sector's risk exposure in social housing delivery and allocating constrained housing budgets. This research assesses the discount rates and estimates the risk profile of social housing delivery faced by public agencies. Three case studies were utilised to present project estimate probability distributions for gaining insight into risk exposure in social housing delivery and helping housing budget allocation at the state government level. The findings recommend the use of an estimated 30‐year treasury bond rate (3.14%) as the PSC discount rate for social infrastructure. Additionally, the results suggest the use of a PPP discount rate for social housing of 6.01%, given a risk‐free rate of 3.14% and a systematic risk premium of 2.87%.

Analysis Towards the Factors Relates to the Yield at Sharia Bond Which Listed on Indonesia Stock Exchange During Period of 2020

This research analyzes the influence caused by the debt equity ratio (DER), maturity, firm size and rating of Islamic bonds on the yield to maturity (YTM) from corporate Islamic bonds. The research population consisted of corporate sharia bonds traded at the Indonesia Stock Exchange during period of 2020. The sample choosen technique was performed by purposive sampling. The research sample consisted of 59 corporate bonds that issued from 13 companies through all sectors except the banking and financial sectors. The research analysis method used descriptive statistics and multiple linear regression. The outcomes showed partially that the maturity variable had a significant positive affect to YTM, Rating had a negative affect on YTM, while DER and Islamic bond ratings had no affect on YTM. The research implication stated that companies need to increase their sharia bond ratings in order to maintain investor trust. For further research, it is expected to analyze other variables which had an impact to YTM because the coefficient of determination that reached from this research are 67%, while the remaining of 33% was determined by other variables which not explained in this research.

Bank loans during the 2008 quantitative easing

We examine the effect of quantitative easing on the supply of bank loans. During the Fed’s quantitative easing programs, lending banks reduced relatively more loan spreads, offered longer loan maturities, provided larger loans, and loosened more covenants for firms whose long-term bond ratings were below BBB and were lower than those with investment-grade bond ratings. Furthermore, we find that new bank loans in this period were associated with a reduction in a firm’s value and an increase in default risk. These results indicate that banks took greater risk during the 2008 quantitative easing by relaxing lending standards to relatively riskier borrowers.

Calculating the force-dependent unbinding rate of biological macromolecular bonds from force-ramp optical trapping assays

The non-covalent biological bonds that constitute protein–protein or protein–ligand interactions play crucial roles in many cellular functions, including mitosis, motility, and cell–cell adhesion. The effect of external force (F) on the unbinding rate ({k}_{text{off}}left(Fright)) of macromolecular interactions is a crucial parameter to understanding the mechanisms behind these functions. Optical tweezer-based single-molecule force spectroscopy is frequently used to obtain quantitative force-dependent dissociation data on slip, catch, and ideal bonds. However, analyses of this data using dissociation time or dissociation force histograms often quantitatively compare bonds without fully characterizing their underlying biophysical properties. Additionally, the results of histogram-based analyses can depend on the rate at which force was applied during the experiment and the experiment’s sensitivity. Here, we present an analytically derived cumulative distribution function-like approach to analyzing force-dependent dissociation force spectroscopy data. We demonstrate the benefits and limitations of the technique using stochastic simulations of various bond types. We show that it can be used to obtain the detachment rate and force sensitivity of biological macromolecular bonds from force spectroscopy experiments by explicitly accounting for loading rate and noisy data. We also discuss the implications of our results on using optical tweezers to collect force-dependent dissociation data.

Identification of the Success Factors of the Green Bond Market for Sustainable Development in the COVID-19 Era

This paper attempts to identify the most important factors for the success of the green bond market during the COVID-19 pandemic. Using an interactive management approach, we find that the legal framework for green bond operation and the interest rate of green bond are the major factors in determining the success of the green bond market during the COVID-19 pandemic.

특허출원이 회사채 신용등급에 미치는 영향

In this study, we investigate the effects of patent applications on corporate bond ratings of Korean listed firms. Using an ordered probit regression, we show that firms with higher patent counts and greater patents to R&D investments are likely to have significantly higher bond ratings. This finding remains robust while considering the differences of firms with patenting versus without patenting, and adopting alternative variables measured by industry-adjusted numbers of patent applications. We further explore two possible channels through which patent applications affect corporate bond ratings. First, patent applications provide expectations for increased cash flows with debt market. Second, patent applications enable improved redeployability of assets held by firms. Through a series of analyses, this study sheds lights on the real effects of patenting activities on the debt market via firms’ bond ratings.

IDENTIFICATION OF MULTIPLE BUBBLES IN TURKISH FINANCIAL MARKETS: EVIDENCE FROM GSADF APPROACH

This study examines the explosive behavior in the five local market prices of stock indices (in USD and TRY), 
 bond, CDS, gold, and currency exchange rate of USDTRY at weekly observations over the sample period 
 between 2005 and 2021. We find strong evidence of bubble formations in bond, gold, and currency markets 
 during the crisis (financial and pandemic, such as ongoing COVID-19 outbreak) and non-crisis periods. 
 The findings show both unidirectional and bidirectional causal linkages under the homoscedasticity and 
 heteroscedasticity assumptions. Additionally, the causation is most pronounced under the homoscedastic 
 model between the currency market with the CDS, gold, and stock markets.

Key determinants of bond issue terms on the Catalyst bond market in 2009–2019

The first objective of the article was to determine what makes Polish companies decide to issue bonds (instead of financing themselves with loans or other sources). The second objective was to examine the key factors determining the interest rate of bonds. The research was based on public bonds, listed on the Polish Catalyst bond market. It should be emphasised that this is the first study of this kind on the Polish bond market covering both the issue characteristics and the financial attributes of the issuers. Firstly, in order to determine which parameters have a real impact on Polish companies’ issuance decisions, a probit model was created basing on parameters such as the age of the company, its size, asset growth dynamics, leverage, ROA, and investments in fixed assets.Secondly, in order to determine what the real interest rate of the bonds depends on, using linear regression and the least squares method, we examined the key parameters that issuers could consider as leading in determining the future estimated interest rate of the bonds, such as rating, issue collateral, issue size, and maturity.In our research we found that the size of a company and the level of its financial leverage are the main incentives for Polish companies to issue bonds. Moreover, the size of the issuer and the level of its financial leverage are the key factors determining the bonds margin.

EFFECT OF PROFIT MANAGEMENT, FINANCIAL RATIO AND CORPORATE GOVERNANCE MECHANISM ON BOND RATING

Bond ratings issued by rating agencies assist investors in selecting bonds. Bond ratings are very useful for investors and issuers, namely providing information about the company's ability to pay off the bonds issued. The rating issued gives a signal to investors on the quality and risk of a bond. The rating process is carried out by the rating agency by taking into account various factors, such as financial factors through financial ratios, earnings management measures and corporate governance mechanisms. This study aims to provide empirical evidence that earnings management, financial ratios and corporate governance mechanisms affect bond ratings. The subjects of this research are companies listed on the Indonesia Stock Exchange and listed on PT. PEFINDO 2008-2011. The sample selection was done by purposive sampling method, in order to obtain 11 companies that meet the criteria with 4 years of observation. The data used in the form of secondary data derived from the financial statements and bond rating database of PT. PEFINDO, while the data analysis used logistic regression analysis. The results show that earnings management, liquidity ratios, managerial ownership and audit quality have an effect on bond ratings. Meanwhile, the activity ratio, market value ratio, institutional ownership and independent commissioners have no effect on bond ratings. The conclusion of this study is that of the 8 variables used in this study only earnings management variables, liquidity ratios, managerial ownership and audit quality can be used to predict a company's bond rating. Suggestions that can be given are that the next researcher can replace the research sample using financial companies, add a complete corporate governance variable and be careful in interpreting a company's financial ratios.

Experimental and statistical dry-fracture assessment of the CFRP-concrete interface bond

A study of the dry CFRP-concrete interface bond is presented. The main objective of this research endeavor is to characterize this bond as a material property, akin to that of Young's modulus or Poisson's ratio, using the novel experimental single contoured-cantilever beam (SCCB) fracture mechanics testing approach. The dry fracture results came from two categories of specimens: pristine as well as representative companion beams, the latter category of which was taken from a larger accelerated cycling study (not presented herein) that accompanied wet-dry as well as freeze-thaw weathered specimens. A statistical scheme was used to appropriately reduce and characterize the Mode I critical strain energy release rates (GIc) of the dry CFRP-concrete interface bonds. Weight and strain changes were also monitored in the specimens to verify negligible effects occurring on the bulk concrete substrate. The measured strains enabled assessments to be made relative to ACI Code provisions using both the tensile and splitting-tensile strengths of concrete as critical parameters, to further validate that there was no appreciable development of strain formed at the CFRP-concrete interface. Based on the conducted experimental study, the ranges of the GIc values are determined for these two categories of dry beams. It is found through the experimental program that the CFRP-concrete interface bond exhibits stable cracking as confirmed, both, by quantitative means, using the brittleness index, as well as through a qualitative observation of the fractured surface displaying a cohesive mode of failure. It is also shown that the experimental tensile strengths of the interface bonds are dramatically well within ACI Code strength predictions.

Can the dual-rating regulation improve the rating quality of Chinese corporate bonds?

We developed a dual-reputational rating shopping model to introduce public and institutional reputations. Investor’s and regulator’s penalty rates are described as public and institutional reputations, respectively. We achieved the available conditions of single-rating and dual-rating regulations to prevent rating inflation in this model. To examine the regulatory effects of different types of regulations on Chinese corporate bond ratings, we utilize panel ordered logit models. Theoretical analysis and empirical tests show that, when the reputation effect is low, the single-rating regulation is better at improving rating quality, and when the reputation effect is high, the dual-rating regulation induces rating agencies to provide more accurate ratings. Compared to the regulatory effects of the single-rating and the multi-rating regulations, the dual-rating regulation most effectively improves the rating quality of corporate bonds and prevents rating inflation.

What Is the Relationship between Higher Education and Neoliberalism in the United States?

What Is the Relationship between Higher Education and Neoliberalism in the United States?

How foreign participation in the Colombian local public debt market has influenced domestic financial conditions

Since 2014, participation of foreign investors in the Colombian local public bond market has increased substantially. One of the factors that has driven this result is the increased weight of Colombia in JP Morgan´s Government Bond Index. Some evidence suggests that the resulting inflows have reduced bond and loan interest rates and raised the loan supply. There is also evidence of an increased sensitivity of local public bond yields to CDS and EMBI given the inflows, although the influence of external financial conditions on domestic lending rates has remained subdued. Finally, no evidence is found of a shift in the transmission of domestic monetary policy shocks to public bond and lending interest rates after the increase in foreign participation in the local bond market.

Asymptotics for Markov chain mixture detection

Sufficient conditions are provided under which the log-likelihood ratio test statistic fails to have a limiting chi-squared distribution under the null hypothesis when testing between one and two components under a general two-component mixture model, but rather tends to infinity in probability. These conditions are verified when the component densities describe continuous-time, discrete-state-space Markov chains and the results are illustrated via a parametric bootstrap simulation on an analysis of the migrations over time of a set of corporate bonds ratings. The precise limiting distribution is derived in a simple case with two states, one of which is absorbing which leads to a right-censored exponential scale mixture model. In that case, when centred by a function growing logarithmically in the sample size, the statistic has a limiting distribution of Gumbel extreme-value type rather than chi-squared.

Cash Management in Russian Metallurgical and Oil and Gas Companies

The problem of money management has remained relevant over the past years. The aim of the study is to assess the impact of debt and cash flow on the amount of cash on companies with and without financial constraints. The main hypothesis of the study is that the impact of debt and cash flow on the level of cash depends on financial constraints which were taken as two proxy variables – dividend payment and bond rating. To substantiate the hypothesis put forward, a regression model of the influence of debt and cash flow on the level of cash is built in the work.
 For the analysis, large Russian companies in the metallurgical and oil and gas industries were sorted in accordance with financial constraints. Based on the results of the constructed regression model, the following conclusions can be drawn. Borrowed funds of companies negatively affect the amount of cash on the balance sheet, regardless of the presence andtype of financial constraints. Cash flow is not statistically significant for companies without financial constraints.
 This study has some limitations. The research results can be useful for corporate CFOs in order to optimize cash balances.

Inscriptions of resilience: Bond ratings and the government of climate risk in Greater Miami, Florida

In recent years, credit rating agencies have begun to incorporate a municipality's resilience and vulnerability to climate change into their US municipal bond rating methods. Drawing on the case of Greater Miami resilience planning and Science and Technology Studies-inspired work on inscriptive devices, I investigate how this incorporation practically happens, and how it shapes the ways that Greater Miami governments attempt to govern climate risk through resilience investments. What “counts” as resilience there, I suggest, is increasingly an effect of the observational practices of rating agencies. However, the still-emergent status of resilience as an object of knowledge among rating agencies and Greater Miami governments means that resilience retains a degree of plasticity, allowing government officials and residents alike to mobilize the term for different purposes and toward different ends. In tracing the emergent relations between rating agency practice on climate risk and local government resilience investments, the paper makes two contributions to scholarship in economic and urban geography. First, it illuminates the ways that extra-local practices of expert valuation shape the local construction of environmental fixes. Second, it offers insights into how one of the key actors of the 2007–2008 financial crisis is beginning to lay the epistemic groundwork for future economic crises and inequalities in and between cities, this time as they relate to climate change impacts and a city's supposed resilience and vulnerability to them.

The Effect Of Profitability, Liquidity, Leverage On Bond Rating Of Financial Companies

This research was ain determine and analyze the effect of Simultaneous and Partial on Current Ratio, Debt to Equity Ratio, and Return On Assets on Bond Ratings in financial sector companies on the Indonesia Stock Exchange for the 2016-2019 period. The population of this reserach is the financial sector companies as many as 94 companies. The sampling method used purposive sampling, and the number of samples obtained was 18 companies. This type of research is quantitative descriptive using multiple linear regression analysis method. The results of this research show that the variables Current Ratio, Debt to Equity Ratio, and Return On Assets simultaneously have a significant effect on the Bond Rating of financial sector companies on the Indonesia Stock Exchange (IDX) in 2016-2019. Partially, Current Ratio, Debt to Equity Ratio, and Return On Assets have a significant positive effect on Bond Ratings for financial sector companies on the Indonesia Stock Exchange (IDX) in 2016-2019.

Managerial Ability and Bond Rating: A Focus on Controlling Shareholders’ Ownership Structure

ABSTRACT Although managerial ability is important for credit risk assessment, it is unclear whether local credit rating agencies consider it an independent risk factor. We examine how Korean agencies evaluate the impact of managerial ability on bond rating depending on controlling shareholders’ ownership structure. We identify controlling shareholders using family-owned businesses (chaebols). The results show that the positive effect of managerial ability on bond rating is diminished in chaebol firms, especially those with a high control–ownership wedge, compared to non-chaebol firms. These findings suggest that managerial ability carries higher weight in the rating process for firms with better ownership structure.

Credit ratings, financial ratios, and equity risk: A decomposition analysis based on Moody’s, Standard & Poor’s and Fitch’s ratings

This paper applies regression-based methods to analyze the variation in corporate bond ratings within and between credit rating agencies (CRAs). The between-variation is decomposed via the Binder–Oaxaca method, whereas the within-variation is decomposed into three components corresponding to financial ratios, equity risk, and CRA’s private information (residual). In the period from 1995 to 2019, the contribution of equity risk has ascended substantially from 10% to about 30% whereas financial ratios’ importance has declined from 70% to 40%. The gap between Fitch’s ratings and Moodys’/S&P’s was largely due to companies’ endogenous shopping for ratings rather than the difference in rating criteria.