In this research I have used bonds data from the Israeli financial market, in order to establish to what extent the Israeli credit market is efficiently rated by both existing rating agencies ("Maalot" and "Midrug"). Results show that the bond market does refer to ratings as a measurement of risk, however, further investigating have proven that it was not the entire risk involved in the investment process. The results of this research suggests that a better rating process should be adopted perhaps by adding a third investor-paid rating agency that would separate the unhealthy linkage between the issuer of the bond and the rating agency, enabling the rating process to be more objective and trustfully by investors to capture all related risks. | On the efficiency of the corporate bond market and the rating agencies: Evidence from the israeli bond market
