What moves stock prices around credit rating changes?

Using monthly and multi-day return windows, research shows that credit rating downgrades often reveal new information lead to significant stock price reactions but upgrades do not. intraday data, we revisit these findings extend them by examining the possibility of informed trading ahead announcement changes. Credit agencies delay public announcements changes provide issuers with time review respond reports, which opens door for in advance data on from S&P, Moody’s, Fitch, find a more modest reaction than documented elsewhere show prices long-term issuer ratings not single instrument or subset instruments. Most interestingly, start moving before downgrade announcement, controlling other news investor anticipation. These pre-announcement movements are concentrated among observations where analysts motivated disclose private their careers. The beneficiaries disclosures appear be institutional investors.