Existence of Solicited Unsolicited Ratings

Unsolicited rating agencies convey information about potential borrowers to investors whether or not the borrowers want it to do so. However, as they do this without the consent of the borrowers, they are not paid for this service by the borrowers. It is often argued that this is done to build reputation. In this paper, we develop a model that identifies the scenarios where unsolicited ratings can co exist profitably with solicited ratings