Graduation Year
2016
Date of Submission
4-2016
Document Type
Open Access Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Fan Yu
Terms of Use & License Information
Rights Information
© 2016 Robert H. Owlett
Abstract
I re-examine “rating shopping” and “rating catering” in the market for AAA rated collateralized debt obligations (CDOs) by replicating the study of Griffin and Tang (2013) using post-crisis data. I find a sharp increase in the amount of CDOs that received a single rating, suggesting that CDO underwriters were more cautious about formally soliciting multiple ratings. However, I also find a decrease in AAA rating disagreements between S&P and Moody’s, implying that issuers shopped their CDOs through informal conversations with agencies. Finally, I find investors correctly accepted tighter credit spreads for dual-rated CDOs because dual-rated CDOs experienced fewer rating downgrades than single rated deals. These results differ from the pre-crisis findings of Griffin and Tang (2013) and are consistent with the existence of rating shopping and disappearance of rating catering during the post-crisis period.
Recommended Citation
Owlett, Robert H., "A Re-Examination of Rating Shopping and Catering using Post-Crisis Data on CDOs" (2016). CMC Senior Theses. 1408.
https://scholarship.claremont.edu/cmc_theses/1408
