01814cas a2200253 a 4500 AALejournalIMF007065 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455218981 1018-5941 BD-DhAAL BD-DhAAL Jaramillo, Laura. Sovereign Credit Ratings and Spreads in Emerging Markets : Does Investment Grade Matter? / Laura Jaramillo, Michelle Tejada. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (17 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Sovereign investment grade status is often associated with lower spreads in international markets. Using a panel framework for 35 emerging markets between 1997 and 2010, thispaper finds that investment grade status reduces spreads by 36 percent, above and beyond what is implied by macroeconomic fundamentals. This compares to a 5-10 percent reduction in spreads following upgrades within the investment grade asset class, and no impact formovements within the speculative grade asset class, ceteris paribus. While global financial conditions play a central role in determining spreads, market sentiment improves with lower external public debt to GDP levels and higher domestic growth rates. Mode of access: Internet Tejada, Michelle. IMF Working Papers; Working Paper ; No. 2011/044 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/044/001.2011.issue-044-en.xml IMF e-Library