We find direct evidence that sovereign default risk has a negative impact on corporate performance via a rating spillover pooling mechanism. Our results show that this adverse effect is concentrated in firms that are more likely to experience limited access to external finance following a rating...

We examine the impact of the COVID-19 pandemic on CDS spreads of companies around the world. We find that the pandemic-induced increases in corporate CDS spreads are concentrated in firms with higher leverage, non-investment-grade rating, lower profitability, and higher stock volatility. Further...