Bond Ratings Research Articles

Effect of Debt-to-Asset Ratio, Maturity, Guarantees, and Company Size on Bond Ratings in Construction Companies

The purpose of this study was to determine and analyze effect of the debt-to-assets ratio, maturity,guarantee, and company size on construction company bond ratings. The population and sample of thisresearch is construction companies that publish complete financial reports from 2014 to 2022. Dataanalysis uses logistic regression analysis. The results showed that: 1) Debt to assets ratio has nosignificant effect on the probability of bond ratings, because investors tend to buy bonds because they seethe company's reputation not from the Debt to Assets Ratio obtained by the company; 2) Maturity has nosignificant effect on bond ratings, because investors tend to buy bonds with ages under 3 years, becausecompanies with maturity under 3 years are able to pay off their obligations to pay the loan principal atmaturity; 3) Guarantees have no significant effect on bond ratings, because investors tend to buy bondsbecause they look at the company's reputation, not from what is guaranteed and not guaranteed to thecompany; 4) Company size has no significant effect on bond ratings, because investors tend to buy bondsnot in terms of company size but from the company's reputation; 5) The debt-to assets ratio, maturity,guarantee, and company size affect bond ratings.

Simulation of the dynamic cracking of brittle materials using a nonlocal damage model with an effective strain rate effect

In this study, a nonlocal multiscale damage model that considers the effect of a strain rate is presented. Moreover, this model is combined with the scaled boundary finite element method (SBFEM) and quadtree mesh for dynamic crack propagation in quasi-brittle materials. The scaling centre of each SBFEM subdomain was selected as the material point, and the bond connecting two material points was referred to as the material bond. Microscopic damage was quantified based on the stretch rate of the material bond, and macroscale topological damage was calculated by taking the weighted average of the microscopic damage over the bonds within the influence domain. The bell distribution function is utilised as the weight function in the calculation of the nonlocal weight function. To account for the impact of the strain rate during dynamic loading, an effective rate R is introduced to enhance multiscale damage by modifying the damage threshold and bond softening coefficient throughout the analysis process. By analysing the energetic degradation function of the phase field, which establishes a connection between the macroscale topological damage and energy-based damage, a nonlocal multiscale damage model was incorporated into the framework of the SBFEM. Quadtree mesh discretization was employed to achieve rapid and high-quality multilevel mesh generation by effectively utilising the hanging nodes. Three typical dynamic cracking examples were simulated using the proposed model, and the results were compared with the relevant experimental results and references. The results show that the method is suitable for accurate dynamic cracking simulation in quasi-brittle materials. Moreover, the results indicate that the proposed method can spontaneously simulate dynamic crack bifurcation without introducing additional crack bifurcation criteria. For a compact tensile test of concrete under different loading rates, the method proposed in this study can accurately simulate the corresponding failure modes. The results also show that without considering the effect of the strain rate, the damage develops rapidly in an unconstrained state, which is inconsistent with the actual case.

The Influence of Liquidity and Solvability on the Bond Ratings of Indonesia stock exchange : Evidence From the Raw Materials Sector

Bonds are issued by companies and government agencies seeking capital with long-term debt. Bonds still carry risks for investors, namely the possibility of default, like other financial assets . Bond ratings are one indicator that can be used to measure this risk. Liquidity and sovability ratios can be used as indicators that can assess a company's capacity to pay all short and long term debts on time. The aim of this research is to examine the influence of liquidity ratios and solvency ratios on the bond ratings of basic materials sector companies listed on the Indonesia Stock Exchange. The objects of observation in this research are all public companies in the basic materials sector which are listed on the Indonesia Stock Exchange and whose bonds are rated by PT. Pefindo during the 2017-2021 period. Observations were taken using a purposive sampling technique because they have certain criteria. The method used in this research uses panel data regression analysis techniques with the help of E-Views 12. The research results show that 1) liquidity can be used as a benchmark to influence the rating of a bond and 2) the solvency ratio cannot be used as a benchmark that can influence the rating of a bond.
 
 Key words: bonds; bond ratings; liquidity ratio; solvency ratio; cash ratio; debt to equity ratio

Quantitative peptide release kinetics to describe the effect of pH on pepsin preference

The preference of pepsin to hydrolyse certain peptide bonds is typically determined by counting peptides after hydrolysis, without considering concentrations and kinetics. In this study, peptide release was quantified to describe proteolysis by pepsin. The aim was to investigate whether pH affects individual hydrolysis rates of peptide bonds. α-Lactalbumin was hydrolysed by porcine pepsin systematically at pH 1–5 and peptides were identified and quantified with UPLC-PDA-MS at eight time points. Apparent pH-based differences in specificity were caused by differences in total hydrolysis rate but the relative hydrolysis rates of cleavage sites were generally independent of pH. Previous statements of pepsin preference for amino acids in the P3-P3′ positions withstand when considering the hydrolysis rates of cleavage sites and was pH independent. Despite the a-specificity of pepsin, many bonds were not or slowly hydrolysed, some cleavage sites became more accessible during hydrolysis (demasking) and some became less accessible (masking).

Polymer Mechanochemistry in Microbubbles.

Polymer mechanochemistry is a promising technology to convert mechanical energy into chemical functionality by breaking covalent and supramolecular bonds site-selectively. Yet, the mechanochemical reaction rates of covalent bonds in typically used ultrasonication setups lead to reasonable conversions only after comparably long sonication times. This can be accelerated by either increasing the reactivity of the mechanoresponsive moiety or by modifying the encompassing polymer topology. Here, a microbubble system with a tailored polymer shell consisting of an N2 gas core and a mechanoresponsive disulfide-containing polymer network is presented. It is found that the mechanochemical activation of the disulfides is greatly accelerated using these microbubbles compared to commensurate solid core particles or capsules filled with liquid. Aided by computational simulations, it is found that low shell thickness, low shell stiffness and crosslink density, and a size-dependent eigenfrequency close to the used ultrasound frequency maximize the mechanochemical yield over the course of the sonication process.

The Impact of Credit Rating on Pricing of Green Bond Issues - An Empirical Analysis Based on the TIC Model

As an important part of green finance, green bonds have become more and more obvious in the market, and their pricing has received more and more attention. As an important factor affecting bond pricing, it is necessary to explore the impact of credit rating on the pricing of green bond issues. This paper focuses on exploring the impact of credit rating on the pricing of green bond issuance by empirically analyzing the data of some green bonds issued in 2018-2022, and finds that: the credit rating of green bonds has a significant impact on their issuance interest rate, and the higher the credit rating, the lower the financing cost of green bonds; the issuance period, the issuance scale and the whether to set up the put provision and the call provision also affect the financing cost of green bond.

The double‐edged sword of going “overboard”: Board connectedness, debt quality, and the cost of debt

AbstractBoard connectedness, a result of directors serving the boards of more than one firm, impacts companies positively (access to resources provided by connected directors) and negatively (directors being “spread too thin”). Given that debt quality has a high influence on the cost of debt, this paper examines how the cost of debt (bond yield spread) is influenced by a firm's board connectedness while considering the effect that debt quality (bond ratings) may have on such a relationship. Results show that the relationship between connectedness and the cost of debt is highly dependent on debt quality, where connectedness is associated with a lower cost of debt if debt quality is high; however, connectedness is also associated with a higher cost of debt if debt quality is low. We also note that as the debt quality for connected firms decreases as their cost of debt increases. We are contributing to administrative sciences by studying one of its key elements: governance, more specifically the connectivity of boards of directors. This contributes to the current debate on the effect of board connectivity: prior research has not provided conclusive results, and we show that the effect is different based on the characteristics of the firm's debt.

An intelligent resource allocation strategy for machine type communication environment

SummaryMobile communication has multiplied in many digital intelligent applications. The machine‐type communication (MTC) services have afforded flexible communication facilities considering those facilities. However, high energy consumption and poor data rate have made the MTC a complex system. So, the resource allocation strategy has been introduced by different procedures such as neural models, optimization, and mathematical models. But, in some cases, these algorithms have recorded high complexity and high resource requirement. Hence, the present research article has planned to develop a novel Chimp‐based Extreme Neural Model (CbENM) for allocating the desired optimal resource for each machine user. Moreover, the resources were assigned based on the task completion deadline. Before the resource allocation process, the active state users were predicted by analyzing their data rate and deadlines. Finally, the desired resources were allocated to each user, and the performance was validated. The presented model has a lower delay bond rate and a high data aggregate rate.

Does financial cycle affect corporate bond ratings? – Evidence from macro and micro interaction effects

In recent years, China's bond market defaults frequently, and the credibility of credit rating agencies needs to be tested. The disorganized bond market increases the systemic risk in China, which is not conducive to the smooth operation of the social economy. This paper studies effects of financial cycle on credit rating by constructing a game model between enterprises and credit rating agencies. Regression test results of A-share listed companies from 2010 to 2019 show that the financial cycle can promote the willingness of enterprises to hold bonds, which affects the further game between enterprises and rating agencies and promotes the "pro-cyclical" upgrade of ratings. Further exploration shows that large-scale, non-listed and non-industrial companies are more sensitive to financial cycles. The contributions of this paper are as follows: First, this paper discusses the mechanism by which financial cycle affects credit rating through the influence of corporate bond financing behaviour, and expands a new research perspective for the study of how macroeconomic factors affect credit rating; Second, it clarifies the logic of credit rating changes. In the modelling process of this paper, the influence of complex endogeneity is fully taken into account, and it is verified that when the external credit supply changes, corporate financing decisions will be affected first, and credit ratings will be affected later. The research conclusions of this paper have important implications for how to regulate the behaviour of rating agencies and improve the quality of ratings.

Profitability, Leverage, Liquidity and Bond Age On Bond Rating

The rating of a bond becomes a guideline in purchasing bonds. The purpose of this study was to determine the effect of Profitability, Leverage, Liquidity, and Bond Age on Bond Ratings in Public Companies Listed on the IDX for the 2017-2018 period. The sample consisted of 34 companies using purposive sampling technique and analyzed using logistic regression data analysis. The results of this study indicate that simultaneously Profitability, Leverage, Liquidity and Bond Age have a significant effect on Bond Ratings while Profitability and Leverage partially have a significant effect on Bond Ratings, but Liquidity and Bond Age partially have no significant effect on Bond Ratings. The use of Logistics analysis is a novelty of this research because variable Y has a limited value/ordinal scale. Liquidity and bond age which are generally used as the basis for making decisions to buy bonds, in this study were not revealed as the next novelty of this research.

Analysis of mechanical properties and deformation characteristics of debonding-repaired slab track

ABSTRACT To investigate the influence of debonding-repair materials on interface damage and deformation characteristics in track structures, a finite element model was established to represent CRTS III prefabricated slab track with debonding repairment under various conditions. The mechanical properties and deformation law of the track structure under the combined loads of train and temperature gradient were analysed under intact interlayer, debonding without repairment, and debonding-repaired conditions. Results show that both the interface damage area and stress increase in line with the temperature gradient, and that positive temperature gradients have a greater effect on interface damage than negative temperature gradients. In addition, the interface damage area and stress increase can be effectively slowed down with debonding repairment materials. Specifically, under a temperature gradient of 90°C/m, the failure rate of interfacial bonds is 21.2%, 29.6%, and 2.1% for conditions of intact interlayer, debonding without repairment, and debonding with repairment, respectively. In debonding conditions, the maximum vertical displacements along the lateral and longit udinal direction increase about 1.1 times ~ 2.3 times under positive temperature gradients more than the intact interlayer condition. Further, the pattern and peak vertical deformation for track slab are basically the same between the intact interlayer and the repaired debonding conditions. The calculation results indicate that the repair measures can alleviate interfacial adhesive deterioration and reduce the deformation of the track structures.

Financial Ratios Impact: Bond Ratings in Indonesian Stock Exchange Manufacturing Companies

This study aimed to investigate the impact of Retained Earning, Growth of Company, and Interest Coverage Ratio on bond ratings of manufacturing companies listed in the Indonesian Stock Exchange. The study used a quantitative approach with a sample of 104 bonds issued by seven companies that were rated by PEFINDO from 2014 to 2017. The data were analyzed using logistic regression analysis and processed using SPSS 18. The results showed that Retained Earning, Growth of Company, and Interest Coverage Ratio had a significant simultaneous effect on bond ratings. However, Retained Earning and Interest Coverage Ratio had a partial effect on bond ratings, while Growth of Company had no effect. This study implies that investors and bond issuers should pay attention to these financial ratios to make informed investment decisions.Highlights :
 
 
 
 
 
 
 Financial ratios are essential tools for evaluating the health and performance of manufacturing companies.
 Bond ratings are influenced by financial ratios such as Retained Earning, Growth of Company, and Interest Coverage Ratio.
 Logistic regression analysis can be used to determine the simultaneous and partial effects of financial ratios on bond ratings, providing valuable information for investors making informed investment decisions.
 
 Keywords: financial ratios, bond ratings, manufacturing companies, investment decisions, logistic regression analysis.
 
 
 
 
 
 
 
 
 

Will Goodwill Affect the Credit Rating of Corporate Bonds? - Evidence from the Chinese Bond Market

This paper mainly studies the impact of goodwill indicators on corporate bond ratings. The author selects the data of 7931 corporate bonds issued from 2015 to 2021 as the research sample and uses regression analysis to conduct research. The empirical results show that the proportion of goodwill is negatively correlated with the rating of bonds. Specifically, the moderating effect of the company's nature and the industry is significant. Compared with state-owned enterprises, the proportion of goodwill is considered more by the bond grade issued by non-state-owned enterprises. Compared with the industrial sector, the rating of non-industrial sector bonds takes goodwill more into account.

Research on the Interest Rate Risk Strategy of Bond Market

Compared with stocks, bond investment can not only reduce relatively large risk losses, but also ensure that the investment status is healthy and stable. However, whether the product trend in the bond market can be used as a tool for monitoring economic conditions is a question worth pondering. This articles main function is discussing why the bond market is useful and the influence and difference of bonds maturity and interest rate for the economy and investor. Through the research and discussion of the article, the paper focused on the conclusion that the comparison of the interest rates of long-term bonds and short-term bonds in the bond market in the same period can reflect the overall economic situation of the market to a certain extent, and the significance of this conclusion is that, It can not only enable investors to observe the market trend through the interest rates of bonds of different maturities, and make choices for their next investment decisions, but also enhance the functionality of the financial market and strengthen the connection with the economic market.

The influence of environmental information transparency of green bond on credit rating

This paper analyses the impact of environmental information transparency of green bonds on credit ratings . Collecting 217 green bonds issued during 2019–2021 as a research sample. The empirical evidence found that the relationship between environmental information transparency and the credit rating of green bonds is significantly positive; the relationship between environmental information transparency and the credit rating of green bonds is negatively influenced by the penalties imposed on the issuing entities by environmental protection authorities.

Pengaruh Cash Ratio, Gross Profit Margin (GPM), Debt To Equity Ratio (DER), Dan Earning Per Share Terhadap Peringkat Obligasi

The purpose of this study is to determine the effect of Cash Ratio, Gross Profit Margin (GPM), Debt To Equity Ratio (DER), Earning Per Share (EPS) on Bond Ratings in basic industrial and chemical sector companies listed on the Indonesia Stock Exchange for 2021-2022 for 32 quarters. The samples used were 32 out of 48 samples with purposive sampling techniques. The data analysis technique uses multiple linear regression analysis with data processing using SPSS 25 software. The results showed a variable relationship between Cash Ratio, Gross Profit Margin (GPM), Debt To Equity Ratio (DER), and Earning Per Share (EPS) to Bond Rating of 0.670 (strong). Cash Ratio positively affects the Bond Rating of 0.406 or 40.6%. Gross Profit Margin (GPM) negatively affects the Bond Rating by 0.100 or 10%. The Debt To Equity Ratio (DER) negatively affects the Bond Rating by 0.001 or 0.01%. Earnings Per Share (EPS) negatively affects a Bond Rating of 0.005 or 0.05%.
 Keywords: Cash Ratio, Gross Profit Margin (GPM), Debt To Equity Ratio (DER), Earning Per Share (EPS), Bond Rating.

Green bond spread effect of unconventional monetary policy: Evidence from China

The development of green bond market is of great significance to the low-carbon transformation of China’s economy. However, green bond financing costs have remained high. The People’s Bank of China has guided the market to actively participate in green bond investment and financing activities by including green bonds in the scope of qualified collateral for monetary policy instruments. Against this backdrop, the role of unconventional monetary policy in reducing the cost of green financing is a critical topic being discussed in academia. In this study, we examine the cost impact of unconventional monetary policy on green financing, particularly green bonds. Specifically, using bond market data from 2016 to 2020, we construct a difference-in-difference (DID) model to empirically test the effect of China’s unconventional monetary policy on the financing cost of green bonds. The results indicate that unconventional monetary policy reduces the trade spread of green bonds compared with non-green bonds in the secondary market. However, the effect on the spreads of primary market green bonds is insignificant. Furthermore, through sub-sample tests based on ownership and bond ratings, this study finds that unconventional monetary policy has a more pronounced impact on the transaction spreads of AA+ and AA rated green bonds, green bonds issued by state-owned enterprises, large-scale green bonds, as well as long-term green bonds in the secondary market. Based on the above conclusions, we put forward policy suggestions to improve the top-level design of green bond market and activate the enthusiasm of bond trading from two aspects: expanding the scope of green bond collateral of central bank lending programs and enhancing the issuance advantages of green bond in the primary market.

The positive impact of increased government bailout on weakening corporate default risk

Abstract Along with the increasing uncertainty of the global economy and the spread of the new crown pneumonia epidemic, the risk challenges to economic development have increased significantly, and the risk of corporate debt defaults has become more pronounced. As an important component of the capital market, the bond market also began to experience credit bond defaults during this period. Since 2021 the global bond market has shown a sharp increase in defaults, with the default rate of non-state enterprise bonds significantly higher than the overall market, and the capital market has also ushered in a period of pain and accelerated credit risk release. Enterprises are on the verge of bankruptcy restructuring and urgently need the government to provide a bailout and stabilize the market. Therefore, this paper uses the financial data of Chinese listed companies from 2016-2021, constructs a relief intensity variable using the equity pledge rate of listed companies before the relief (2021), and empirically analyzes the impact of local government relief and financing cost on the default risk of listed companies using an intensity double difference model. The results of this study show that: (1) local government bailout significantly reduces the default rate of listed companies by 13%; (2) the effect of local government bailout varies significantly depending on whether listed companies have connected transactions with financing platform companies, and the increase of bailout intensity increases the return on assets of listed companies with related transactions with financing platform companies by 9.8%, which laterally reduces the default rate of corporate debt; (3) the cost of financing is an important mechanism by which local government bailouts affect the credit default rate of listed companies, with a regression correlation of 0.75; (4) the above effect is more pronounced in regions with a higher degree of marketization, with a 9% increase in the effect. The findings of this paper are important for actively managing the risk of dual corporate debt and credit defaults and enhancing the effectiveness of macroeconomic regulation during the epidemic period.

离心圆盘式有机肥撒施机改进设计与仿真分析

Aiming at the poor efficiency in crushing a handful of caking organic fertilizers spraying from the traditional disc spreader, an improved disc spreader equipped with spike-tooth crushing unit was designed with the introduction of its structural composition and working principle. Also simulation experiments were carried out based on the discrete element method according to the solutions made before and after the structural improvement. Firstly, a granular organic fertilizer model was established based on the EDEM and a caking organic fertilizer bonding model was built based on the HMB (Hertz-Mindlin with bonding) contact model. Then two organic fertilizer spreading models corresponding to the solutions were respectively established, based on which simulation experiments were repeated three times on the spreading process. The analysis on the particle velocity vector diagram revealed the interaction relationship between organic fertilizers with the toothed shaft, external wall and disk, verifying the crushing mechanism of crushing unit. By calculating the total number of the bonds generated and broken in the spreading process in both of the spreading models, the average broken rate of bonds in the spreading process was separately 58.87% and 98.05% based on each solution, revealing that the improved solution outperformed the traditional solution in terms of the efficiency in crushing the caking organic fertilizers. This research will be a reference in designing the critical components or improving the overall performance of disc spreader.

Domestic Political Unrest and Sovereign Bond Ratings in the Developing World

This paper integrates the credit rating agency and domestic conflict literatures, investigating the effects of non-violent and violent domestic political unrest on sovereign bond ratings. Using up to 60 developing countries and 94 unrest cases from 1996-2018, we find that while countries under domestic unrest often receive bond downgrades, non-violent unrest appears not to be responsible. Further, we use mediation analysis and show that respect for the rule of law and economic stability seem to mediate the relationship between violent and non-violent unrest and bond ratings. Given developing countries' need to issue debt, and the critical role credit rating agencies play in rating sovereign bonds, our work suggests that countries should seek to avoid violent domestic political unrest if for no other reason than to acquire lower-cost capital.