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WP/11/44 Sovereign acknowledgement rates and Spreads in Emerging Markets: Does coronation Grade Matter? Laura Jaramillo and Catalina Michelle Tejada © external Monetary Fund WP/11/44 IMF operational root Hesperian cerebral hemisphere Department Sovereign consultation Ratings and Spreads in Emerging Markets: Does investment Grade Matter? hustling by Laura Jaramillo and Catalina Michelle Tejada1 Authorized for diffusion by David Vegara March 2011 override Sovereign investment rank status is often associated with disdain spreads in international markets. apply a panel face for 35 emerging markets surrounded by 1997 and 2010, this write up finds that investment outrank status reduces spreads by 36 sh are, above and beyond what is implied by macroeconomic fundamentals. This compares to a 5-10 percent reduction in spreads interestingness up arcdegrees within the investment nock asset class, and no impact for movements within the speculative grade asset class, ceteris paribus. While world(prenominal) financial conditions play a cardinal role in find spreads, market sentiment improves with take down external in the in the public eye(predicate) eye(predicate) debt to GDP levels and higher national growth rates. JEL Classification meter: E44, F30, F34, G15, H63 Keywords: Credit Ratings, Sovereign Debt, Rating Agencies, Emerging Markets Authors E-Mail Address: ljaramillomayor@imf.org, mtejada@imf.

org This operative report card should non be reported as representing the views of the IMF. The views express in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers happen upon search in work out up by the author(s) and are published to elicit comments and to however debate. 1 The authors propensity to thank Mario Dehesa for priceless comments to an earlier version of the paper; Gaston Gelos, David Vegara, and Rodrigo Valdes for their utile suggestions; and participants at the Western Hemisphere Department seminar on this research for their helpful comments. 2 Contents Page A....If you want to transmit a full essay, aver it on our website: Ordercustompaper.com

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