Sovereign credit ratings during the COVID-19 pandemic

Yen Tran, Huong Vu, Patrycja Klusak* (Corresponding Author), Moritz Kraemer, Tri Hoang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)
1 Downloads (Pure)


Using 603 sovereign rating actions by the three leading global rating agencies between January 2020 and March 2021, this paper shows that the severity of sovereign ratings actions is not directly affected by the intensity of the COVID-19 health crisis (proxied by case and mortality rates) but through a mechanism of its negative economic repercussions such as the economic outlook of a country and governments’ response to the health crisis. Contrary to expectations, credit rating agencies pursued mostly a business-as-usual approach and reviewed sovereign ratings when they were due for regulatory purposes rather than in response to the rapid developments of the pandemic. Despite their limited reaction to the ongoing pandemic, sovereign rating news from S&P and Moody’s still conveyed price-relevant information to the bond markets.
Original languageEnglish
Article number101879
Number of pages17
JournalInternational Review of Financial Analysis
Early online date12 Oct 2021
Publication statusPublished - Nov 2021

Bibliographical note

Acknowledgments: We would like to thank anonymous referees for their comments and Thang Ngoc Dang and Lucia Murgia for their invaluable research assistance.


  • COVID-19
  • Economic outlook
  • Sovereign credit ratings
  • Rating calendars


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