European credit investor predicts decline of unrated bond deals

Stephen Zinser, chief investment officer of London-based European Credit Management, has predicted that unrated European borrowers will find it increasingly hard to access the capital markets

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Comment by: Douglas Watson. Posted 7 years ago [2010-02-24 15:39:00]

Brings to mind an underappreciated driver of the rating agency business, namely, no bad deed goes unrewarded! While the rating agencies have not exactly distinguished themselves in this credit cycle having been one of the main causes of the severity of the credit crisis, those very misteps have helped create a greater sensitivity to credit risk thus providing a boost to rating demand. Having said that, Europe will continue to be a difficult market for the rating agencies as most issuers can sell bonds with one rating, thus raising the thorney question: how do the rating agencies ocmpete to win business?