Not a taper tantrum but something

Properly used, Corporate Bond ratings are effective tools helping marketing participants to understand risk and return. Simply put, as riskier assets will have lower ratings, and must provide an increase return to investors to entice them to purchase the assets. In other words, “the higher the risk the higher the return”.

The chart [...]

Who cares anymore about ratings agencies?

S&P 500 August 2011 to February 2012

On August 5th after the US market closed, ratings agency Standard & Poors downgraded sovereign debt issued by The United States. The next trading day (Monday, August 8th) the S&P 500 stock market index dropped over 6% in response, fair enough. But as illustrated in the chart [...]

Goodbye EFSF, we barely got to know you

EFSF change in funding costs after Friday January13th’s S&P EU downgrades

The European Financial Stability Facility (EFSF), the vehicle designed to stablise the European appears to have been dealt a grievous blow by last Friday’s ratings actions by Standard and Poors. In May, EFSF CFO Christophe Frankel was quoted by Euromoney “The EFSF structure [...]

EU 17 Ratings Scorecard

S&P EU 17 ratings January 16th 2012

In the aftermath of Friday’s sovereign downgrades by Standard and Poor’s, I thought it might be useful to present an overview of the EU 17. In summary: overall, S&P communicated that with the exception of Germany, all of the remaining nations are on negative outlook, meaning additional [...]