Credit Ratings and Acquisitions

Aktas, Nihat; Karampatsas, Nikolaos; Petmezas, Dimitris; Servaes, Henri

doi:10.2139/ssrn.2625736

Cited by 6 publications

(2 citation statements)

References 49 publications

(41 reference statements)

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“…Similar to Aktas et al (2018), who find no evidence that companies rated at the investmentgrade cut-off curtail their acquisition behavior, we consider whether companies with credit levels between BB and BBB, that is, those on the borderline between investment and non-investment grade (referred to as the "CRL cut-off" in what follows), seek to obtain more than one credit rating. Panel B of Table 6 shows that 57 out of the 313 rated firms possess a first credit rating at the cut-off point (i.e.…”

Section: Effects Of Credit Rating Levelsmentioning

confidence: 99%

Do Multiple Credit Ratings Reduce Money Left on the Table? Evidence from U.S. IPOs

2019

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We examine initial public offerings (IPOs) with single, multiple, and no credit ratings. We document a beneficial effect of credit ratings on IPO underpricing, which is amplified by the existence of multiple credit ratings. Multiple ratings also reduce the extent of filing price revisions. Credit rating levels matter for IPOs with more than one rating but not for those with a single rating. Firms with multiple credit ratings also have higher probabilities of survival than those with a single or no rating. Finally, IPOs awarded a first credit rating between BB and BBB are more likely to seek an additional rating.

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Section: Effects Of Credit Rating Levelsmentioning

confidence: 99%

Do Multiple Credit Ratings Reduce Money Left on the Table? Evidence from U.S. IPOs

2019

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“…To summarize, these results support our Hypothesis 2. Similar to Aktas et al (2018), who find no evidence that companies rated at the investmentgrade cut-off curtail their acquisition behavior, we consider whether companies with credit levels between BB and BBB, that is, those on the borderline between investment and non-investment grade (referred to as the "CRL cut-off" in what follows), seek to obtain more than one credit rating. Panel B of Table 6 shows that 57 out of the 313 rated firms possess a first credit rating at the cut-off point (i.e.…”

mentioning

confidence: 99%

Do multiple credit ratings reduce money left on the table? Evidence from U.S. IPOs

Goergen

Gounopoulos

Koutroumpis

2021

Journal of Corporate Finance

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We examine initial public offerings (IPOs) with single, multiple, and no credit ratings. We document a beneficial effect of credit ratings on IPO underpricing, which is amplified by the existence of multiple credit ratings. Multiple ratings also reduce the extent of filing price revisions. Credit rating levels matter for IPOs with more than one rating but not for those with a single rating. Firms with multiple credit ratings also have higher probabilities of survival than those with a single or no rating.Finally, IPOs awarded a first credit rating between BB and BBB are more likely to seek an additional rating.

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