Detecting conflicts of interest in credit rating changes: a distribution dynamics approach

Financial Innovation

Table 2 The average ratings of Moody’s and EJR by rating category

EJR rating letter	Moody's	EJR	Moody's—EJR
AAA	19.87	22	− 2.13
AA+	19.78	21	− 1.22
AA	18.85	20	− 1.15
AA−	17.38	19	− 1.62
A+	16.52	18	− 1.48
A	15.74	17	− 1.26
A−	14.92	16	− 1.08
BBB+	14.15	15	− 0.85
BBB	13.58	14	− 0.42
BBB−	12.74	13	− 0.26
BB+	11.67	12	− 0.33
BB	10.73	11	− 0.27
BB−	10.06	10	0.06
B+	8.91	9	− 0.09
B	7.91	8	− 0.09
B−	6.94	7	− 0.06
CCC+	6.95	6	0.95
CCC	6.05	5	1.05
CCC−	4.73	4	0.73
CC	5.93	3	2.93
C	3.98	2	1.98
All	13.20	13.86	− 0.66
Investment grade	14.85	15.77	− 0.93
Speculative grade	9.51	9.52	− 0.01

This table reports the average firm-month rating from Moody’s and EJR in the rating category of EJR. That is, for the firms (issuers) in each EJR rating grade, we compute the average ratings from Moody’s issued to those firms. The last column reports the rating differences between Moody’s and EJR. We also report the average ratings and rating differences in the overall sample, investment grade and speculative grade samples