Today the European Parliament adopted rules designed to limit the ability of ratings agencies to downgrade sovereign creditors. It's a move that a lot of people are deriding as a "shoot the messenger" approach to sovereign debt issues. But today Bloomberg also published a study showing that this is a case of a messenger who's largely talking nonsense. You might think that borrowing costs rise in the wake of a downgrade and fall in the wake of an upgrade, but in reality it's a 50-50 proposition:
Almost half the time, government bond yields fall when a rating action suggests they should climb, or they increase even as a change signals a decline, according to data compiled by Bloomberg on 314 upgrades, downgrades and outlook changes going back as far as 38 years. The rates moved in the opposite direction 47 percent of the time for Moody’s and for S&P. The data measured yields after a month relative to U.S. Treasury debt, the global benchmark.
Worth keeping in mind.