Abstract:

The purpose of the paper was to analyse the impact of the country’s credit ratings on the cost of the capital. It was made an analysis of existing research on the presented topics. We use static panel data methods for 135 countries between 2002 – 2012 years. As independent variables we take account long and short term country credit ratings granted by Standard and Poor and Moody’s Investor Services. Credit ratings are converted linearly into numeric variables. We analyze how credit ratings and the history of defaults influence on interest and maturity on new external debt commitments (official and private), deposit and lending interest rates, interest rate spread, real interest rate and risk premium on lending. Key Words: Interest Rate, Credit Risk, Cost Of The Capital, External Debt, Risk Premium On Lending.

Keywords: