A firm paid to make a hierarchical judgement about how risky an asset, usually debt in some form, is. Different rating agencies use different terminology. Three firms dominate the market – Moodys, S&P and Fitch.
| Moody’s | S&P | Fitch | Rating description | ||||
|---|---|---|---|---|---|---|---|
| Long-term | Short-term | Long-term | Short-term | Long-term | Short-term | ||
| Aaa | P-1 | AAA | A-1+ | AAA | F1+ | Prime | Investment-grade |
| Aa1 | AA+ | AA+ | High grade | ||||
| Aa2 | AA | AA | |||||
| Aa3 | AA− | AA− | |||||
| A1 | A+ | A-1 | A+ | F1 | Upper medium grade | ||
| A2 | A | A | |||||
| A3 | P-2 | A− | A-2 | A− | F2 | ||
| Baa1 | BBB+ | BBB+ | Lower medium grade | ||||
| Baa2 | P-3 | BBB | A-3 | BBB | F3 | ||
| Baa3 | BBB− | BBB− | |||||
| Ba1 | Not prime | BB+ | B | BB+ | B | Non-investment grade speculative |
Non-investment grade AKA high-yield bonds AKA junk bonds |
| Ba2 | BB | BB | |||||
| Ba3 | BB− | BB− | |||||
| B1 | B+ | B+ | Highly speculative | ||||
| B2 | B | B | |||||
| B3 | B− | B− | |||||
| Caa1 | CCC+ | C | CCC | C | Substantial risks | ||
| Caa2 | CCC | Extremely speculative | |||||
| Caa3 | CCC− | Default imminent with little prospect for recovery |
|||||
| Ca | CC | ||||||
| C | |||||||
| C | D | / | DDD | / | In default | ||
| / | DD | ||||||
| D | |||||||