Kredi Derecelendirme Kuruluşlarının Belirlediği Kredi Notları İle Hisse Senedi Geri Satın Alma Kararları Arasındaki İlişki

Abstract

This study examines the relationship between credit ratings and firms’ share repurchase behavior using firm-level data for companies listed on Borsa Istanbul (BIST) over 2016–2024. The sample consists of 55 rated firms that have conducted at least one share repurchase; financial data are obtained from the LSEG database, while credit rating information is collected from LSEG, the Public Disclosure Platform and company websites. Probit and logit models are used to estimate the likelihood of repurchase, and OLS regressions with the repurchase amount scaled by total assets as the dependent variable analyze repurchase intensity. All specifications include year and industry fixed effects, with standard errors clustered at the firm level. An additional analysis is conducted for the post-COVID period (2020–2024). Results show that credit ratings play a constraining role in firms’ payout policy. Across all probit, logit and OLS estimations, firms with higher credit ratings are less likely to undertake share repurchases and they repurchase smaller amounts relative to their assets. Conversely, firms with lower credit ratings appear to use share repurchases as a signaling tool to offset low valuations, ease negative market perceptions and convey financial strength. Profitability and firm size emerge as the main determinants of repurchase behavior, whereas leverage and cash holdings have limited explanatory power once firm heterogeneity is controlled for. Sector-level analyses reveal that the negative association between credit ratings and repurchases is concentrated in the financial and manufacturing sectors, while no statistically significant relationship is observed in other sectors. The constraining effect of credit ratings is stronger in the post-COVID subsample, indicating that firms adopt more cautious payout policies under heightened macroeconomic uncertainty. Overall, the study shows that credit rating agencies shape firms’ financial policy choices not only through the cost of capital but also via distribution decisions such as share repurchases.