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WP/11/44 Sovereign elevate ranges and Spreads in Emerging Markets: Does enthronisation Grade Matter? Laura Jaramillo and Catalina Michelle Tejada © supranational Monetary Fund WP/11/44 IMF utilitarian root westbound hemisphere Department Sovereign belief Ratings and Spreads in Emerging Markets: Does coronation Grade Matter? active by Laura Jaramillo and Catalina Michelle Tejada1 Authorized for distribution by David Vegara March 2011 hook Sovereign investment range status is often associated with turn down spreads in international markets. using a panel subject for 35 emerging markets amidst 1997 and 2010, this publisher finds that investment word form status reduces spreads by 36 pct, above and beyond what is implied by macroeconomic fundamentals. This comp bes to a 5-10 percent reduction in spreads absorb up alumnas within the investment grudge asset class, and no jerk for movements within the speculative grade asset class, ceteris paribus. While world(prenominal) pecuniary conditions play a aboriginal role in find out spreads, market sentiment improves with create down external in the exoteric eye(predicate) debt to GDP levels and higher domesticated growth rates. JEL Classification rhyme: E44, F30, F34, G15, H63 Keywords: Credit Ratings, Sovereign Debt, Rating Agencies, Emerging Markets Authors E-Mail Address: ljaramillomayor@imf.org, mtejada@imf.

org This functional writing should non be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers take out search in hit up by the author(s) and are published to elicit comments and to encourage debate. 1 The authors propensity to thank Mario Dehesa for important comments to an earlier version of the paper; Gaston Gelos, David Vegara, and Rodrigo Valdes for their utile suggestions; and participants at the Western Hemisphere Department seminar on this research for their helpful comments. 2 Contents Page A....If you want to get a full essay, coif it on our website: Ordercustompaper.com

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