CREDIT RATINGS AND THE MARKET FOR GENERAL OBLIGATION MUNICIPAL BONDS
- 1 March 1973
- journal article
- research article
- Published by University of Chicago Press in National Tax Journal
- Vol. 26 (1) , 17-27
- https://doi.org/10.1086/ntj41791850
Abstract
A model of the general obligation municipal bond market provides for an analysis of the credit rating process and for a test of the assumption that credit ratings affect municipal borrowing costs. It is found that published credit ratings do have an effect on municipal yields which is independent of the market's evaluation of the financial status of the rated communities. For this reason, the potential discriminatory behavior of rating agencies is worthy of considerable attention.Keywords
This publication has 3 references indexed in Scilit:
- What's in a Bond RatingJournal of Financial and Quantitative Analysis, 1969
- A Statistical Rating Index for Municipal BondsCFA Magazine, 1969
- Postwar Market for State and Local Government SecuritiesPublished by Walter de Gruyter GmbH ,1960