Do multiple credit ratings reduce money left on the table? Evidence from U.S. IPOs

Marc Goergen, Dimitrios Gounopoulos, Panagiotis Koutroumpis

Research output: Contribution to journalArticlepeer-review


Using credit ratings as an uncertainty-reducing mechanism, we provide evidence of the beneficial impact of multiple credit ratings on reducing IPO underpricing and filing price revision. We find that the acquisition of multiple ratings in the pre-IPO period mitigates uncertainty more than the acquisition of a single rating. Multi-rated firms also have higher probabilities of survival than those with a single rating, whereas credit rating levels matter only for IPOs with more than one rating. The IPOs that are awarded the first rating on the borderline between investment and non-investment grades are more likely to seek an additional rating.
Original languageEnglish
Article number101898
Number of pages59
JournalJournal of Corporate Finance
Early online date12 Jan 2021
Publication statusE-pub ahead of print - 12 Jan 2021


  • nitial public offerings (IPOs); credit ratings; IPO underpricing; survivorship

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