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Credit rating
11 august 2021
Risk level indicator mainly related to the probability of bankruptcy. It is most often assigned to bonds or their issuers. Globally, credit ratings are most often published by three credit agencies - Standard & Poor's, Moody's and Fitch. The credit rating is determined on a scale, with Standard & Poor's and Fitch using a similar scale, which can be systematized as follows:
AAA
AA +
AA
AA-
A+
BBB+ Investment rating
BBB
BBB-
BB+ Speculative rating
BB
BB-
B+
B
B-
CCC
CC
C
D In bankruptcy
Moody's use a different scale, with the boundary between investment and speculative rating being Baa3.
Example:
The Republic of Greece has gone through a turbulent period as a result of the global financial crisis. At the beginning of 2006, the country's credit rating was A. At the peak of the crisis for the country in 2012, the country briefly had an SD rating - a modification of D coming from selective bankruptcy, i.e. Selective Default. A month later, Greece received a credit rating of CCC, and as of April 2021 it has a credit rating of BB.
