A MULTIVARIATE STUDY OF SPANISH BOND RATINGS

In this paper we analyse the ratings given in 1993 to the main Spanish banks, both private and governmental. We use 24 financial ratios obta ined from the balance and the profit and loss accounts. Multidimension al scaling (MDS), a multivariate technique which is intuitive and robu st to the data, forms the basis of the study. This is complemented wit h other multivariate statistical techniques such as cluster analysis, property fitting (Profit) and discriminant analysis. The results ident ify the financial information that has been used by the rating agency. They also confirm the conjecture that other factors, such as the publ ic or private character of the institution, have also been taken into account by the rating agents. Copyright (C) 1996 Elsevier Science Ltd