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This guide: Helps explain what credit ratings are and are not, who uses them and how they may be useful to the capital markets. Provides an overview of different business models and methodologies used by different ratings agencies.
c) The national scale ‘A+’ rating, for example, is not directly comparable across national scales or to the international scale. The ‘A+’ national scale rating can only be viewed as relative risk of an issue or issuer within a single jurisdiction.
A close look at data on bank credit ratings and agency publications leads to three key findings. First, all three major rating agencies (Fitch Ratings, Moody’s Investors Service and Standard & Poor’s) consider the creditworthiness of large European and US banks to have worsened materially since the onset of the crisis.
The rating scale, running from a high of Aaa to a low of C, comprises 21 notches. It is divided into two sections, investment grade and speculative grade. The lowest investment-grade rating is Baa3. The highest speculative-grade rating is Ba1.
Fitch’s credit rating scale for issuers and issues is expressed using the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative grade) with an additional +/- for AA through CCC levels indicating relative differences of probability of default or recovery for issues.
Credit ratings are forward-looking opinions about an issuer’s relative creditworthiness. They provide a common and transparent global language for investors to form a view on and compare the relative likelihood of whether an issuer may repay its debts on time and in full.
NCR assigns long-term credit ratings on a scale ranging from 'AAA', reflecting the strongest credit quality, to 'D', reflecting the lowest. Rating categories from 'AA' to 'B' are modified by plus (+) and
