A controversy erupted regarding bond- rating agencies when some agencies began to provide unsolicited bond ratings....

A controversy erupted regarding bond- rating agencies when some agencies began to provide unsolicited bond ratings. Why do you think this is controversial? Additionally, around the time that real estate began to drop sharply the rating agencies again came under fire as nearly all real estate back bonds were rated triple A. Can anyone find more information on this controversy?

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Unsolicited Bond rating are issued by the bond rating without getting in touch with the the bond issuer and they will be providing with this bond ratings voluntarily and they may be unfavourable to the bond issued and that can be controversial in nature because those bond issuer will be feeling that they are not properly aware of the situation of the company and they have issued these ratings out of no proportion.

This is controversial because this is mostly unfavourable to the bond issuer and he will be trying to not agree with these unsolicited Bond ratings because the bond rating company has not been in touch with the bond issuer and hence this bond issuer will feel that the bond have not been adequately rated.

these real estate bonds are related to financial crisis of 2008 when Bond rating companies have been issuing them with high credit ratings even if they are sub standard properties and sub standard assets so these Bond rating company have not been efficiently valuing real estate sector and they have been accused of misapportionment.

jeff jeffy answered 2 years ago

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