Preferred Stock Returns, CreditWatch, and Preferred Stock Rating Changes

This paper examines the announcement effects of CreditWatch placement and reratings upon a sample of preferred stock issues that were placed on CreditWatch and later rerated or affirmed by Standard & Poor's. Results indicate that CreditWatch provides information to market participants and m...

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Bibliographic Details
Published inThe Financial review (Buffalo, N.Y.) Vol. 25; no. 2; pp. 265 - 285
Main Authors Wansley, James W., Elayan, Fayez A., Maris, Brian A.
Format Journal Article
LanguageEnglish
Published Oxford, UK Blackwell Publishing Ltd 01.05.1990
Subjects
Mathematical models
Preferred stock
Rating services
Statistical analysis
Stock prices
Studies
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Summary:This paper examines the announcement effects of CreditWatch placement and reratings upon a sample of preferred stock issues that were placed on CreditWatch and later rerated or affirmed by Standard & Poor's. Results indicate that CreditWatch provides information to market participants and may have reduced the surprise associated with subsequent reratings. CreditWatch placement may be an erroneous signal, however, since nearly 50 percent of the issues placed for negative reasons were not downgraded, but affirmed, upon removal from Credit Watch.
Bibliography:ark:/67375/WNG-ZSZRS33G-T
ArticleID:FIRE265
istex:53D2564332F6491A9F6B8A7AC87D1E1B4DD1CF69
ISSN:0732-8516
1540-6288
DOI:10.1111/j.1540-6288.1990.tb00796.x