Heterogeneity Of Rating Agencies, Bond Defaults And Credit Ratings

The cultivation and development of credit rating agencies is the key to the development of corporate bond market.At present,some credit rating agencies have been established in China,but there is still a lack of authoritative,objective and fair credit rating agencies with social credibility.With the normalization of bond default and the introduction of various non-governmental credit bonds,the significance of rating agencies has become increasingly protruding.Studying the impact of bond default on the credit rating of ratings agencies in the perspective of institutional heterogeneity is helpful to reveal the behavioral characteristics of ratings agencies in China,and has positive significance for improving the quality of credit rating and managing credit risk in China.Firstly,this paper analyses the main characteristics of China's rating agencies,and expands the heterogeneity of rating agencies into two perspectives: payment model and reputation level.Then,it analyses how bond default affects the ratings of ratings agencies under different payment modes and different reputation levels.Based on the market data of corporate bonds and corporate bonds from 2015 to 2018,this paper uses ordered logit model to empirically analyze the impact of bond default on the credit rating of ratings agencies in the event of institutional heterogeneity.Among them,the credit rating data use the main rating results of 2016-2018,and the company's financial indicators and the reputation of credit rating agencies use the data of the previous year.Empirical results show that in the corporate bond and corporate bond market,bond default will tighten the rating standards and depress the rating results.But under different payment modes,bond defaults have different effects on the ratings agencies.The bond default event will relax the rating standards and overestimate the credit rating results of the ratings agencies under the issuer-paid model,and will tighten the credit rating standards and prudently ratings of the ratings agencies under the investor-paid model.The impact of bond default on the credit rating of ratings agencies is also different under different reputation levels.Increasing the number of delinquency incidents will make high-reputation rating agencies tighten credit rating standards and prudent rating;but for low-reputation rating agencies,not only will they not tighten credit rating standards,but they will overestimate the credit rating results with the increase of delinquency incidents.This paper suggests that the relevant departments should strengthen the public opinion propaganda of rating agencies to help local rating agencies accumulate reputation capital and establish an effective reputation restraint mechanism.Moreover,the regulatory authorities should control the licensing of rating agencies under the issuer-paid model,reduce the phenomenon of "rating purchase" caused by market competition,and cultivate diversified credit rating agencies.Rating agencies should establish their own information disclosure system,facilitate the supervision of the public and regulatory departments,and jointly promote the development of the rating industry.