The article analyzes 732,426 newspaper items published by top U.S. media outlets on S&P 1500 firms. The results show that negative media coverage has a strong association with credit rating change events, but positive media coverage does not. The study provides support for two channels that confirm this finding: the media’s fundamental information content and the media’s reputational pressure. Credit rating agencies appear to consider the fundamental information embedded in negative media coverage and recognize negative market sentiment when making rating change decisions.
This paper, titled "Does Media Coverage Affect Credit Rating Change Decisions?", presents the first evidence on whether media coverage affects credit rating change decisions.