An issuer rating is the assessment and provision of an opinion on an issuer’s overall capacity to pay its long or short-term financial obligations, it focusing on the issuer’s ability and willingness to meet its financial commitments on a timely basis. Whereas well-secured debt can be rated above the issuer rating, an issuer rating is rated above junior debt and junior debt is rated above preferred stock. Issuer ratings may be higher or lower than an issuer’s issue rating. Generally, an issuer rating is published for all companies that have issue ratings but can also be conducted and published for those firms that do not have a ratable issue.
Most credit ratings pertain to issue ratings, which are the assessment and provision of an opinion on specific corporate and public-sector debt issues or other financial obligations and can be either long-term or short-term. Specific issues can be rated higher or lower than the issuer rating and take into account the probability of recovery associated with the specific rated debt.
Credit rating services assign both short-term and long-term issuer and issue ratings for safety of principal, interest or dividends. Standard & Poor’s (S&P’s), Moody’s Investor Service and Fitch Ratings are the three major global credit rating services.
High-quality issues assigned a rating of AAA to BBB- by Standard & Poor’s or Aaa to Baa3 by Moody’s are investment grade. Such bonds are considered suitable investments for banks, trust departments and fiduciaries, such as pension funds. A bond issued by a firm or public-sector entity with an S&P’s rating of BB+ or Moody’s Ba rating or below are speculative‑grade and considered risky with regard to the issuer’s capacity to pay interest and repay the principal.
| Investment-Grade Ratings of Credit Rating Agencies | ||||||||||
| Credit Agency | ||||||||||
| Fitch IBCA | AAA | AA+ | AA | AA− | A+ | A | A− | BBB+ | BBB | BBB− |
| Moody's | Aaa | Aa1 | Aa2 | Aa3 | A1 | A2 | A3 | Baa1 | Baa2 | Baa3 |
| Standard & Poor's | AAA | AA+ | AA | AA− | A+ | A | A− | BBB+ | BBB | BBB− |
| Speculative-Grade Ratings of Credit Rating Agencies | ||||||||||||
| Credit Agency | ||||||||||||
| Fitch IBCA | BB+ | BB | BB− | B+ | B | B− | CCC+ | CCC | CCC− | CC | C | D |
| Moody's | Ba1 | Ba2 | Ba3 | B1 | B2 | B3 | Caa1 | Caa2 | Caa3 | Ca | C | |
| Standard & Poor's | BB+ | BB | BB− | B+ | B | B− | CCC+ | CCC | CCC− | CC | C | D |
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