Moody's published for the first time on March 10, 2009 a list of Bottom Rung non-financial companies. Considering the high stakes for both Moody's and the potential candidates for inclusion in the list we examine what effects does the inclusion in the Bottom Rung list have on the included company's performance. Surprisingly, none of the original public Bottom Rung firms have been liquidated. We also attempt to identify what criteria exactly is Moody's utilizing to select the companies of the Bottom Rung list. We find that firms included in the Bottom Rung list prior to the inclusion date experience lower cumulative returns compared to a matched sample of control firms. We also find that the Bottom Rung firms do not underperform the control group after the publication of the list.
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