The influence of possible credit score upgrades and downgrades on companies’ capital structure
Autor(a) principal: | |
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Data de Publicação: | 2022 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/41451 |
Resumo: | The present Dissertation purpose is to understand if and how managers alter their firm’s capital structure when facing possible upgrades or downgrades of credit ratings through a sample of 10339 observations in the 20012021 timespam. The possible changes in credit rating are observed through two different dummy variables. The first one CRpom includes companies with a plus or a minus in their credit rating and thus regrouping firms near notch rating changes. The second one CRhorl takes the value of one for companies in the higher and lower third of each rating based on a score calculated through an equation that tries to mimic credit rating agencies’ scores criteria. The results show that managers do adapt capital structure but only for changes in credit ratings and interestingly in opposite ways. Companies near upgrades tend to use less debt while the ones near a downgrade seem to have a decrease in debt. The same questions are asked for a second sample where debt is broken down into seven categories. Bond levels are significantly impacted by upgrades and downgrades. More precisely, companies in either situation see bond levels diminish. This also highlights the importance of studying debt as a complex and heterogeneous source of financing. The results are robust for investment and noninvestment grade companies as well as across credit ratings and time. |
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The influence of possible credit score upgrades and downgrades on companies’ capital structureCredit ratingsCapital structureDebtManagerial actionsRatings de créditoEstrutura de capitalDívidaDecisões de gestãoDomínio/Área Científica::Ciências Sociais::Economia e GestãoThe present Dissertation purpose is to understand if and how managers alter their firm’s capital structure when facing possible upgrades or downgrades of credit ratings through a sample of 10339 observations in the 20012021 timespam. The possible changes in credit rating are observed through two different dummy variables. The first one CRpom includes companies with a plus or a minus in their credit rating and thus regrouping firms near notch rating changes. The second one CRhorl takes the value of one for companies in the higher and lower third of each rating based on a score calculated through an equation that tries to mimic credit rating agencies’ scores criteria. The results show that managers do adapt capital structure but only for changes in credit ratings and interestingly in opposite ways. Companies near upgrades tend to use less debt while the ones near a downgrade seem to have a decrease in debt. The same questions are asked for a second sample where debt is broken down into seven categories. Bond levels are significantly impacted by upgrades and downgrades. More precisely, companies in either situation see bond levels diminish. This also highlights the importance of studying debt as a complex and heterogeneous source of financing. The results are robust for investment and noninvestment grade companies as well as across credit ratings and time.O objetivo da presente Dissertação é entender se e como os gestores alteram a estrutura de capital das empresas diante possíveis upgrades ou downgrades de ratings de crédito, utilizando uma amostra de 10339 observações no período de 20012021. As possíveis mudanças nos ratings são medidas utilizando duas variáveis. A primeira variável CRpom inclui empresas com mais ou menos na sua notação de crédito e, portanto, agrega empresas perto de mudanças de rating. A segunda CRhorl assume o valor de um para empresas no tercil superior e inferior de cada rating, tendo por base uma pontuação calculada através de uma equação que tenta replicar os critérios de classificação das agências de notação de crédito. Os resultados mostram que os gestores adaptam a estrutura de capital, mas apenas para mudanças nas notações de crédito e, curiosamente, de maneiras opostas. As empresas perto de upgrades tendem a usar menos dívida, enquanto as próximas de um downgrade parecem diminuir a dívida. As mesmas perguntas são feitas para uma segunda amostra em que a dívida é dividida em sete categorias. A dívida titulada é significativamente afetada por upgrades e downgrades. Mais precisamente, as empresas em ambas as situações vêm o nível de títulos diminuir. Este resultado também destaca a importância de estudar a dívida como uma fonte complexa e heterogénea de financiamento. Os resultados são robustos para empresas acima e abaixo de investment grade, bem como para diferentes ratings e períodos.Bonfim, DianaVeritati - Repositório Institucional da Universidade Católica PortuguesaUbiali, Alexia Nicole2023-06-28T08:47:17Z2023-01-262022-122023-01-26T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10400.14/41451TID:203253043enginfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-12T17:47:01Zoai:repositorio.ucp.pt:10400.14/41451Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T18:34:08.586777Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The influence of possible credit score upgrades and downgrades on companies’ capital structure |
title |
The influence of possible credit score upgrades and downgrades on companies’ capital structure |
spellingShingle |
The influence of possible credit score upgrades and downgrades on companies’ capital structure Ubiali, Alexia Nicole Credit ratings Capital structure Debt Managerial actions Ratings de crédito Estrutura de capital Dívida Decisões de gestão Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
title_short |
The influence of possible credit score upgrades and downgrades on companies’ capital structure |
title_full |
The influence of possible credit score upgrades and downgrades on companies’ capital structure |
title_fullStr |
The influence of possible credit score upgrades and downgrades on companies’ capital structure |
title_full_unstemmed |
The influence of possible credit score upgrades and downgrades on companies’ capital structure |
title_sort |
The influence of possible credit score upgrades and downgrades on companies’ capital structure |
author |
Ubiali, Alexia Nicole |
author_facet |
Ubiali, Alexia Nicole |
author_role |
author |
dc.contributor.none.fl_str_mv |
Bonfim, Diana Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Ubiali, Alexia Nicole |
dc.subject.por.fl_str_mv |
Credit ratings Capital structure Debt Managerial actions Ratings de crédito Estrutura de capital Dívida Decisões de gestão Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
topic |
Credit ratings Capital structure Debt Managerial actions Ratings de crédito Estrutura de capital Dívida Decisões de gestão Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
description |
The present Dissertation purpose is to understand if and how managers alter their firm’s capital structure when facing possible upgrades or downgrades of credit ratings through a sample of 10339 observations in the 20012021 timespam. The possible changes in credit rating are observed through two different dummy variables. The first one CRpom includes companies with a plus or a minus in their credit rating and thus regrouping firms near notch rating changes. The second one CRhorl takes the value of one for companies in the higher and lower third of each rating based on a score calculated through an equation that tries to mimic credit rating agencies’ scores criteria. The results show that managers do adapt capital structure but only for changes in credit ratings and interestingly in opposite ways. Companies near upgrades tend to use less debt while the ones near a downgrade seem to have a decrease in debt. The same questions are asked for a second sample where debt is broken down into seven categories. Bond levels are significantly impacted by upgrades and downgrades. More precisely, companies in either situation see bond levels diminish. This also highlights the importance of studying debt as a complex and heterogeneous source of financing. The results are robust for investment and noninvestment grade companies as well as across credit ratings and time. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-12 2023-06-28T08:47:17Z 2023-01-26 2023-01-26T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/masterThesis |
format |
masterThesis |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.14/41451 TID:203253043 |
url |
http://hdl.handle.net/10400.14/41451 |
identifier_str_mv |
TID:203253043 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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