The primary aim of this research is to identify and explain the determinants of corporate credit ratings for companies listed on the S&P500. Credit ratings serve as a crucial source of risk information for financial institutions, enabling them to assess risk and determine the borrowing costs for corporate managers before making lending and financing decisions. To achieve this aim, a Generalized Estimating Equations (GEE) model was employed, which considers a panel structure with a categorical dependent variable (credit rating) and ten independent variables grouped into categories such as leverage, liquidity, interest coverage, profitability, market, survival, and macroeconomic. The sample comprises 2398 observations covering a period of nine years from 2013 to 2021, with 292 public companies operating in the US market. The study reveals that interest coverage, profitability, Tobin’ Q, Total Shareholder Return (TSR), and Altman’s Z-score were a significant factor in explaining credit ratings at a 1% level. Overall, the study provides valuable insights into the factors that affect corporate credit ratings, which can assist financial institutions and companies in making informed lending and financing.
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