Determinants of Bonds Rating: Case Study of Indonesian Banking Listed on The Indonesia Stock Exchange
Muhammad Bayu Aji Sumantri, Nugraha, Maya Sari, Ikaputera Waspada

1 Universitas Pendidikan Indonesia
2 Universitas Pendidikan Indonesia
3Universitas Pendidikan Indonesia
4Universitas Pendidikan Indonesia
*Corresponding author. Email: Muhammad.bayu[at]upi.edu

Abstract

This research aims to study the influence of profitability, solvency, and Good Corporate Governance mechanisms on bond ratings in Indonesia. The population used in this research consists of companies listed on the Indonesia Stock Exchange during the period of 2018-2022, and the sampling method employed is purposive sampling. A sample of 30 companies in the banking sector, which have been listed on the Indonesia Stock Exchange for more than 10 years, was obtained. The data analysis technique used is multiple regression analysis. The research findings reveal that good corporate governance, represented by institutional ownership, profitability represented by Return on Equity, and solvency represented by Debt to Equity Ratio, have a positive influence on bond ratings. However, liquidity represented by the Current Ratio does not have a significant effect on bond ratings.

Keywords: bonds, corporate governance, profitability, solvability

Topic: Financial Management and Accounting