Assessment of the Impact of Internal and External Factors on the Bond Issuer Credit Rating

This paper aims is to construct a reliable model that forecasts the credit ratings published by Moody’s credit agency using public information. During the work, we analyze the impact of internal factors, such as the company’s profitability and leverage ratio, as well as the impact of the factors that are not directly related to the company’s performance such as real GDP growth and inflation rate in the country the company operates in. The model was built using the spatial data from the year 2019 using ordered logit model. The work is structured in divided into three chapters. The first chapter outlines different approaches to modeling credit ratings and analyses the Moody’s methodologies to determine the factors the rating agency pays special attention to. The second chapter specifies the data included in the modeling process and introduces the methods that were used in the research. The third chapter provides the constructed econometric model and assesses its predictive power.