Fixed Income - Bond Rating Definitions


Moody's

S&P

Fitch

 

Long-term

Short term

Long-term

Short-term

Long-term

Short-term

 

Aaa

P-1

AAA

A-1+

AAA

F1+

Prime

An obligor has EXTREMELY STRONG capacity to meet its financial commitments.

Aa1

 

AA+

 

AA+

 

High grade

An obligor has VERY STRONG capacity to meet its financial commitments. It differs from the highest rated obligors only in small degree.

Aa2

 

AA

 

AA

 

 

 

Aa3

 

AA-

 

AA-

 

 

 

A1

 

A+

 

A+

 

 

 

A2

 

A

 

A

 

Upper Medium Grade

An obligor has STRONG capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.

A3

 

A-

 

A-

 

 

 

Baa1

 

BBB+

 

BBB+

 

 

 

Baa2

P-3

BBB

A-3

BBB

F3

Lower medium grade

An obligor has ADEQUATE capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.

Baa3

 

BBB-

 

BBB-

 

 

 

Investment Grade

High Yield / Junk

Investment Grade

High Yield / Junk

Ba1

Not prime

BB+

B

BB+

B

 

 

Ba2

 

BB

 

BB

 

Non-investment grade. Speculative

An obligor is LESS VULNERABLE in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitments.

Ba3

 

BB-

 

BB-

 

 

 

B1

 

B+

 

B+

 

 

 

B2

 

B

 

B

 

Highly speculative

An obligor is MORE VULNERABLE than the obligors rated 'BB', but the obligor currently has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments.

B3

 

B-

 

B-

 

 

 

Caa1

 

CCC+

C

CCC

C

 

 

Caa2

 

CCC

 

 

 

Substantial risks. Extremely speculative

An obligor is CURRENTLY VULNERABLE, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments. In default with little prospect of recovery.

Caa3

 

CCC-

 

 

 

 

 

Ca

 

CC

 

 

 

 

An obligor is CURRENTLY HIGHLY-VULNERABLE.

 

 

C

 

 

 

 

 

C

 

D

/

DDD

/

In default

An obligor has failed to pay one or more of its financial obligations (rated or unrated) when it became due.

/

 

 

 

DD

 

 

 

/

 

 

 

D

 

 

 

WR

 

 

 

 

 

 

Rating withdrawn for reasons including: debt maturity, calls, puts, conversions, etc., or business reasons (e.g. change in the size of a debt issue), or the issuer defaults.




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