These credit-rating scales represent forward-looking assessments of the ability of financial institutions to meet their financial obligations, as provided by global creditrating agencies such as Moody's and S&P.
Credit ratings are classified as long-term and short-term. Long-term ratings are used in assessments of a financial institution's ability to meet long-term obligations, risk of default, and protection of investor rights. Short-term ratings are used for assessments of an institu- tion's ability to meet short-term obligations on funds with original maturities of one year or less, and of risks of default.
Global Short-term Ratings
Global Short-term Ratings
| Category |
Designation |
Definition |
| Investment grade |
Prime-1 |
Issuers rated 'prime-1' have a superior ability to repay short-term debt obligations, usually within one year. |
| Prime-2 |
Issuers rated 'prime-2' have a strong ability to repay short-term debt obligations, usually within one year. |
| Prime-3 |
Issuers rated 'prime-3' have an acceptable ability to repay short-term obligations, usually within one year. |
| Speculative grade |
Not Prime |
Issuers rated 'not prime' do not fall within any of the prime-rating categories. |
S&P
| Category |
Designation |
Definition |
| Investment grade |
A-1 |
Issuers rated 'A-1' have a strong capacity to meet financial commitments. This is S&P's highest designation. |
| A-2 |
Issuers rated 'A-2' have a satisfactory capacity to meet financial obligations. |
| A-3 |
Issuers rated 'A-3' have an adequate capacity to meet financial obligations. |
| Speculative grade |
B |
Issuers rated 'B' are regarded as vulnerable and have significant speculative characteristics. |
| C |
Issuers rated 'C' are currently vulnerable to nonpayment and are dependent upon favorable business, financial, and economic conditions to meet financial commitments. |
| D |
Issuers rated 'D' have failed to pay financial obligations when they were due. |
Global Long-term Ratings
Moody's
| Category |
Designation |
Definition |
| Investment grade |
Aaa |
Extremely strong capacity to meet financial commitments. The highest rating, with the lowest risk level, on par with U.S. Treasury bonds. |
Aa1
Aa2
Aa3 |
Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances. |
A1
A2
A3 |
Adequate capacity to meet financial commitments, but more subject to adverse economic conditions. |
| Speculative grade |
Baa1
Baa2
Baa3 |
Considered the lowest investment grade by market participants. |
Ba1
Ba2
Ba3 |
Considered the highest speculative grade by market participants, with the prospect for recovery of principal. Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions. |
B1
B2
B3 |
More vulnerable to adverse business, financial and economic conditions, but currently having the capacity to meet financial commitments, with some prospect for recovery of principal. |
Caa1
Caa2
Caa3
Ca
C |
Currently vulnerable, with ability to meet financial commitments dependent on favorable business, financial, and economic conditions, with little prospect for recovery of principal. |
| - |
Payment default on financial commitments. |
S&P
| Category |
Designation |
Definition |
| Investment grade |
AAA |
Extremely strong capacity to meet financial commitments. The highest rating, with the lowest risk level, on par with U.S. Treasury bonds. |
AA+
AA
AA- |
Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances. |
A+
A
A- |
Adequate capacity to meet financial commitments, but more subject to adverse economic conditions. |
| Speculative grade |
BBB+
BBB
BBB- |
Considered the lowest investment grade by market participants. |
BB+
BB
BB- |
Considered the highest speculative grade by market participants, with the prospect for recovery of principal. Less vulnerable in the near-term but facing major ongoing uncertainties to adverse business, financial and economic conditions. |
B+
B
B- |
More vulnerable to adverse business, financial and economic conditions, but currently having the capacity to meet financial commitments, with some prospect for recovery of principal. |
CCC+
CCC
CCC-
CC
C |
Currently vulnerable, with ability to meet financial commitments dependent on favorable business, financial, and economic conditions, with little prospect for recovery of principal. |
| D |
Payment default on financial commitments. |