Name
From Trust to Truth: Unlocking Qualitative Insight to Sharpen Bond Rating Accuracy
Date & Time
Tuesday, July 7, 2026, 8:30 AM - 8:55 AM
Description
This study documents a robust positive relationship between rating analysts’ (RAs) trust in CEOs and corporate bond rating accuracy. Further analysis reveals that trust promotes RAs to incorporate more qualitative insight into their rating assessments. The effect is more pronounced when RAs are of higher capability, located farther from the CEO, or when external information is scarce. Additionally, higher trust is associated with fewer bond covenants, while offering spreads remain unaffected, suggesting that investors perceive RAs’ trust in CEOs as a substitute for formal contractual protections. Our findings highlight trust as an important driver of credit rating quality.
Speakers
Keywords
Trust; Rating Accuracy; Corporate Bond; Qualitative Analysis
Theme
CORPORATE FINANCE
Author 1
Yu Su
Author 2
Zhe An
Author 3
Jin Yu