The Rating Agencies and Their Credit Ratings: What They Are, How They Work, and Why They are Relevant

Preface

1 Introduction

1.1 Context and Premises

1.2 Book Chapters

1.3 Supporting Materials

PART A: CREDIT RATING FOUNDATIONS

2 Credit Ratings

2.1 The World of Corporate Defaults

2.2 Credit Rating Scales

2.3 The Interpretation of Credit Ratings

2.4 Credit Ratings: Summary and Conclusions

3 The ‘Raison d’Être’ of Credit Ratings and Their Market

3.1 Needs for Credit Ratings – or the Demand Side of Ratings

3.2 Credit Ratings as a Solution to Information Asymmetry: Economic Analysis.

3.3 Credit Rating Segments – or Scale and Scope of the Rated Universe.

4 How to Obtain and Maintain a Credit Rating

4.1 The Rating Preparation

4.2 The Rating

4.3 Quality of the Rating Process

PART B: CREDIT RATING ANALYSIS

5 The France Telecom Credit Rating Cycle

5.1 From Sovereign Status to Near Speculative Grade

5.2 Turning Point and Rating Recovery (Fall 2002–Winter 2004)

5.3 Analysis and Evaluation

6 Credit Rating Analysis

6.1 Fundamental Corporate Credit Ratings

6.2 Corporate Ratings Implied by Market Data

6.3 Special Sector Ratings

6.4 Technical Appendix

7 Credit Rating Performance

7.1 Relevance: Ratings and Value.

7.2 Preventing Surprise in Defaults: Rating Accuracy and Stability

7.3 Efficiency Enhancement: Stabilization in Times of Crisis

PART C: THE CREDIT RATING BUSINESS

8 The Credit Rating Industry

8.1 The Rise of the Credit Rating Agencies

8.2 Industry Specifics and How they Affect Competition

8.3 Industry Performance

9 Regulatory Oversight of the Credit Rating Industry

9.1 The Regulatory Uses of Ratings

9.2 The Regulation of the Industry

9.3 Analysis and Evaluation

10 Summary and Conclusions

10.1 The Rating Agencies Value Added

10.2 The Challenges Rating Agencies Face Today

10.3 Concluding Thoughts

References

Index