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Can any HNer give some background on solicited/unsolicited ratings? I imagine solicited ratings come about when a company knows it is going to tap into the cred
by dfc 12y ago
Can any HNer give some background on solicited/unsolicited ratings? I imagine solicited ratings come about when a company knows it is going to tap into the credit market and needs something to show to investors. How often do unsolicited ratings happen? What is the impetus (and from where?) for the agency to conduct the unsolicited rating?
- iambateman 12y agoS&P has two revenue sources: "issuer pay" is when a company requests a credit rating for themselves, and pays for it. The other source is "subscription based" paid for by investors. They could want to "create access to a market" or "complete their coverage"* So it's possible an investor requested a review of Tesla for their own information and S&P decided to publish the opinion publicly or S&P just wanted to. Blackmail seems unlikely. * http://lexicon.ft.com/Term?term=unsolicited-rating http://lexicon.ft.com/Term?term=unsolicited-rating
- dfc 12y agoFor posterity's sake I would like to state that I never contemplated blackmail as an explanation.