Managerial ability and bond rating changes

We study the information content of corporate bond rating changes regarding future earnings and dividends. Consistent with previous findings, rating downgrades are associated with negative abnormal stock returns, while rating upgrades appear to be nonevents. For downgrades, earnings decline in the two years prior to and the year of the rating change announcement but increase in the year after the rating review. We also find that rating downgrades are followed by a subsequent downward adjustment in dividends. While rating upgrades follow a period of rising earnings, they do not signal any increase in future earnings and no subsequent dividend adjustments are observed. Overall, our results indicate that rating agencies respond more to permanent changes in cash flows and provide little information, if any, about future cash flows.

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The Association between Municipal Accounting Information and Bond Rating Changes

Journal of Accounting Research ◽

10.2307/2490740 ◽

1982 ◽

Vol 20 (2) ◽

pp. 275 ◽

Cited By ~ 38

Author(s):

Ronald M. Copeland ◽

Robert W. Ingram

Keyword(s):

Accounting Information ◽

Bond Rating ◽

Rating Changes

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Credit Rating Changes and Subordinated Bond Spread: Evidence from China

International Finance and Banking ◽

10.5296/ifb.v2i1.7548 ◽

2015 ◽

Vol 2 (1) ◽

pp. 1

Author(s):

Robin Hang Luo ◽

Jiaji Hao

Keyword(s):

Credit Rating ◽

Informational Content ◽

Credit Rating Agencies ◽

Sample Period ◽

Bond Rating ◽

Rating Agencies ◽

Rating Changes ◽

Statistical Results

We examine the bond spread reaction to subordinated bond rating changes during the sample period of 2006 to 2011 and find that bond spread reacted positively to downgrades, big in magnitude, but not statistically significant. The bond spread reaction to upgrades, however, was mixed and statistically insignificant, and small in magnitude. We conjecture that the insignificant statistical results regarding the effect of rating changes may be due to the lack of informational content of the ratings assigned to the subordinated bonds by Chinese credit rating agencies (CRAs).

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Regulation Fair Disclosure's Effect on the Information Content of Bond Rating Changes

European Financial Management ◽

10.1111/j.1468-036x.2011.00612.x ◽

2011 ◽

Vol 19 (4) ◽

pp. 775-800 ◽

Cited By ~ 4

Author(s):

Winnie P. H. Poon ◽

Dorla A. Evans

Keyword(s):

Information Content ◽

Bond Rating ◽

Rating Changes

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Changes in hospital bond ratings after the transition to a new electronic health record

Journal of the American Medical Informatics Association ◽

10.1093/jamia/ocy007 ◽

2018 ◽

Vol 25 (5) ◽

pp. 572-574 ◽

Cited By ~ 4

Author(s):

Dustin McEvoy ◽

Michael L Barnett ◽

Dean F Sittig ◽

Skye Aaron ◽

Ateev Mehrotra ◽

...

Keyword(s):

Electronic Health Record ◽

Health Record ◽

Apparent Difference ◽

Net Income ◽

Bond Ratings ◽

Bond Rating ◽

Electronic Health ◽

Rating Changes ◽

And Control ◽

The Impact

Abstract Objective To assess the impact of electronic health record (EHR) implementation on hospital finances. Materials and Methods We analyzed the impact of EHR implementation on bond ratings and net income from service to patients (NISP) at 32 hospitals that recently implemented a new EHR and a set of controls. Results After implementing an EHR, 7 hospitals had a bond downgrade, 7 had a bond upgrade, and 18 had no changes. There was no difference in the likelihood of bond rating changes or in changes to NISP following EHR go-live when compared to control hospitals. Discussion Most hospitals in our analysis saw no change in bond ratings following EHR go-live, with no significant differences observed between EHR implementation and control hospitals. There was also no apparent difference in NISP. Conclusions Implementation of an EHR did not appear to have an impact on bond ratings at the hospitals in our analysis.

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