Explore tens of thousands of sets crafted by our community.
Credit Rating Agency Criteria
10
Flashcards
0/10
AAA
AAA is the highest credit quality, with the lowest risk of default. Bonds with AAA ratings are considered to be of the highest creditworthiness.
AA
AA rating signifies a very high credit quality. Although slightly riskier than AAA, entities are still expected to have very strong capacity to meet financial obligations.
CCC
CCC rating suggests that the entity is at real risk of defaulting and depends on favorable business, financial, and economic conditions to meet financial commitments.
CC
CC rating indicates that the entity is currently highly vulnerable to nonpayment and is dependent on favorable business, financial, and economic conditions to meet financial commitments.
D
D rating means the entity has defaulted on its financial commitments. This rating is assigned when an issuer fails to make a payment or a bankruptcy petition is filed.
BBB
BBB rating represents a medium credit quality and a moderate risk of default for investors. It is the lowest investment-grade rating.
A
A rating indicates high credit quality, but more susceptibility to adverse business or economic conditions compared to AA/AAA.
BB
BB rating indicates that the entity has speculative elements, with a higher risk of default. However, it maintains a less vulnerable financial standing than lower-rated bonds.
B
B rating implies that the entity has significant speculative characteristics and a relatively high credit risk. The financial situation depends on favorable business conditions to meet commitments.
C
C rating shows that the entity is currently highly vulnerable to nonpayment and is likely in, or very near, default, with some prospect of recovery of principal and interest.
© Hypatia.Tech. 2024 All rights reserved.