281 new (i.e., DBRS and KBRA) and incumbent (Moody’s, S&P, and DBRS) CRAs adjust tphr ee isrs uc rr ee doi tf rtahtei ni rg sp eaenrds . t hOeui rr rc er es ud li tt sr aa tl isnog rsetvaenadl atrhdast bsams ea dl l oCnR At hs e ( cpoamr t pi ceut liat irvl ye KBRA) tend to inflate their ratings when dealing with more powerful issuers. Pa se ri shsaupesr ss mwai tl hl e rr aCt iRnAg ss hu os ep pt hi ni sg at es nad es tnrcaiteesg py rteof ewr imn obrue soi npet isms if sr toi mc r al at ri ng ge sr aCbRoAvse, or at ht i enrgs f (osre ae sCehcaupr ti et yr t4h) a. tT ihs i sl oecfaf et ec dt si ne eaml os wt oe rb- er i es vk eenn sv ti rr oo nn gmeer nwt ht he ant tchoemy ei ss swu ei t ha higher creditor protection (see Chapter 5). Td ihf fee rr ee anst oCnRfAo sr ims si ug he rt satl os ob eb eh irgehl al yt esde l teoc t ii nv ec own hs iesnt ecnhcoi eoss ionfg CbRe At ws ei enn( raaptpi nl ygisn go)f raas tsiensgs i nmge thhoowd odl oi fgf ei erse. n tI nCt eRrAe ss t ii nn gc loyr, pwo rea toeb tsheer vlee vtehl e os ef ci rnecdoint os irs tpernoctieecst i wo nh ei nn ti nh ceoi rr pmoor da teel st ht oe dl eevteelromf icnree dt hi teo rc rperdoittercat itoi nngisn. Wt h ee i fri nr ids kt haasts eMs os mo deyn’ st wa nhdi l eDwB Re Sf i nd do no such relation for KBRA, S&P and Fitch (see Chapter 5). Ai nl ftlougeent chee rt, hies squuear l ipt yo wo fe rc reendai bt lreadt i nb gy st. hAet ‘ti hs seusearmpea yt si m’ beu, st hi neerses aml s oo dseel esme es mt os bt oe af a rcitsokr sf oi nr ti shseui re rrsa tai nn gd mi novde setl os rws ht ehna tdCeRt eArsmui ns ei ndgi cf freerdeint tr, aot ri nagns . i n c o m p l e t e s e t o f 7.1.3 Investors’ risk perspective Ci novnessitdoerrsi nagr ea lwl et hl le- a wr i as kr es omf e tnht ei osne e dr i sakbs o av ne ,d i tp ri si c eo f t huet mm oas tc ciomr dpionrgtlayn. cIen tohuart study, we show that investors indeed observe risks beyond credit ratings when pricing securities. For instance, we find that investors incorporate other security design factors (such as tranche count and CLO deal size) in their assessment Chapter 7 - General Discussion and Conclusion
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