418:
Poors' definition of an AAA-rated and a BB-rated bond respectively). However, some studies have estimated the average risk and reward of bonds by rating. One study by Moody's claimed that over a "5-year time horizon" bonds it gave its highest rating (Aaa) to had a "cumulative default rate" of 0.18%, the next highest (Aa2) 0.28%, the next (Baa2) 2.11%, 8.82% for the next (Ba2), and 31.24% for the lowest it studied (B2). (See "Default rate" in "Estimated spreads and default rates by rating grade" table to right.) Over a longer period, it stated "the order is by and large, but not exactly, preserved".
1037:: Originally a bi-annual survey which monitors the political and economic stability of 185 sovereign countries, according to ratings agencies and market experts. The information is compiled from Risk analysts; poll of economic projections; on GNI; World Bank’s Global Development Finance data; Moody’s Investors Service, Standard & Poor’s and Fitch IBCA; OECD consensus groups (source: ECGD); the US Exim Bank and Atradius UK; heads of debt syndicate and loan syndications; Atradius, London Forfaiting, Mezra Forfaiting and WestLB.
478:
469:
485:
438:
follows, from excellent to poor: AAA, AA (high), AA, AA (low), A (high), A, A (low), BBB (high), BBB, BBB (low), BB (high), BB, BB (low), B (high), B, B (low), CCC (high), CCC, CCC (low), CC (high), CC, CC (low), C (high), C, C (low) and D. The short-term ratings often map to long-term ratings though there is room for exceptions at the high or low side of each equivalent.
1501:
1478:"COMMISSION IMPLEMENTING REGULATION (EU) 2016/1799 of 7 October 2016 laying down implementing technical standards with regard to the mapping of credit assessments of external credit assessment institutions for credit risk in accordance with Articles 136(1) and 136(3) of Regulation (EU) No 575/2013 of the European Parliament and of the Council"
445:(ECB) for determining collateral requirements for banks to borrow from the central bank. The ECB uses a first, best rule among the four agencies that have the designated ECAI status, which means that it takes the highest rating among the four agencies – S&P, Moody's, Fitch and DBRS – to determine
325:
rankings" table shows the ten least-risky countries for investment as of
January 2018. Ratings are further broken down into components including political risk, economic risk. Euromoney's bi-annual country risk index monitors the political and economic stability of 185 sovereign countries, with
433:
Different rating agencies may use variations of an alphabetical combination of lowercase and uppercase letters, with either plus or minus signs or numbers added to further fine-tune the rating (see colored chart). The
Standard & Poor's rating scale uses uppercase letters and pluses and minuses.
417:
Agencies do not attach a hard number of probability of default to each grade, preferring descriptive definitions such as: "the obligor's capacity to meet its financial commitment on the obligation is extremely strong," or "less vulnerable to non-payment than other speculative issues…" (Standard and
453:
A. M. Best rates from excellent to poor in the following manner: A++, A+, A, A−, B++, B+, B, B−, C++, C+, C, C−, D, E, F, and S. The CTRISKS rating system is as follows: CT3A, CT2A, CT1A, CT3B, CT2B, CT1B, CT3C, CT2C and CT1C. All these CTRISKS grades are mapped to one-year probability of default.
457:
Under the EU Credit Rating Agency
Regulation (CRAR), the European Banking Authority has developed a series of mapping tables that map ratings to the "Credit Quality Steps" (CQS) as set out in regulatory capital rules and map the CQS to short run and long run benchmark default rates. These are
437:
While Moody's, S&P and Fitch
Ratings control approximately 95% of the credit ratings business, they are not the only rating agencies. DBRS's long-term ratings scale is somewhat similar to Standard & Poor's and Fitch Ratings with the words high and low replacing the + and −. It goes as
425:
calculated the additional interest rate or "spread" corporate bonds pay over that of "riskless" US Treasury bonds, according to the bonds' rating. (See "Basis point spread" in table to right.) Looking at rated bonds for 1973–89, the authors found a AAA-rated bond paid 43
430:" (or 43/100 of a percentage point) over a US Treasury bond (so that it would yield 3.43% if the Treasury yielded 3.00%). A CCC-rated "junk" (or speculative) bond, on the other hand, paid over 7% (724 basis points) more than a Treasury bond on average over that period.
449:
and collateral requirements for borrowing. Ratings in Europe have been under close scrutiny, particularly the highest ratings given to countries like Spain, Ireland and Italy, because they affect how much banks can borrow against sovereign debt they hold.
365:. In general, a time horizon of one year or under is considered short term, and anything above that is considered long term. In the past institutional investors preferred to consider long-term ratings. Nowadays, short-term ratings are commonly used.
313:
entity, such as a national government. The sovereign credit rating indicates the risk level of the investing environment of a country and is used by investors when looking to invest in particular jurisdictions, and also takes into account
58:
of the qualitative and quantitative information for the prospective debtor, including information provided by the prospective debtor and other non-public information obtained by the credit rating agency's analysts.
330:
emerging as the least risky country since 2017 – it is also one of the only few countries in the world as well as the only in Asia to achieve a AAA sovereign credit rankings from all
1073:
1010:
942:
1311:
1210:
1399:
1449:
1424:
349:
defines "country risk" as the risk that country-specific factors could adversely affect an insurer's ability to meet its financial obligations.
1342:
1285:
932:
1268:
994:
1137:
937:
331:
1193:
1477:
1473:
1445:
1420:
1395:
947:
75:
1048:
50:
or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor
1077:
1014:
1318:
1229:
1505:
984:
1536:
1369:
399:
1526:
411:
395:
1098:
442:
306:
1159:
Cantor, R., Hamilton, D.T., Kim, F., and Ou, S., 2007 Corporate default and recovery rates. 1920–2006,
380:
55:
1346:
1289:
1119:
1400:"Amended Mapping of Moody's Investors Service credit assessments under the Standardised Approach"
387:
374:
1123:
410:. They use letter designations such as A, B, C. Higher grades are intended to represent a lower
1450:"Amended Mapping of S&P Global Ratings' credit assessments under the Standardised Approach"
441:
S&P, Moody's, Fitch and DBRS are the only four ratings agencies that are recognized by the
1264:
1221:
1189:
1133:
1125:
The New
Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness
990:
446:
358:
338:
51:
1183:
1129:
1034:
1531:
1511:
959:
391:
315:
17:
1425:"Amended Mapping of Fitch Ratings' credit assessments under the Standardised Approach"
1132:: Cornell University Press. p. 36, Bond Rating Symbols and Definitions, Table 2.
1011:"Country risk survey - previous ranking from previous quarter, Euromoney Country risk"
477:
1520:
407:
71:
468:
964:
434:
The Moody's rating system uses numbers and lowercase letters as well as uppercase.
427:
362:
342:
322:
63:
484:
310:
238:
164:
35:
403:
346:
220:
1225:
1245:
from Altman, Edward I "Measuring
Corporate Bond Mortality and Performance"
327:
294:
124:
1500:
1185:
The Rating
Agencies and Their Credit Ratings: What They Are, How They Work
43:
256:
184:
47:
1472:
European
Commission, based on a draft from the Joint Committee of the
467:
1261:
The
Standard & Poor's Guide to Measuring and Managing Credit Risk
276:
202:
144:
39:
357:
A rating expresses the likelihood that the rated party will go into
66:) – is a subset of credit rating – it is a numeric evaluation of an
384:
1370:"First crunch date in Europe's ratings calendar is April 11"
394:, but also the corporations itself. Ratings are assigned by
341:
risk or payment default risk for exporters (also known as a
1163:
Moody's investor
Service, June Report 102071, 1-48 page 24
1343:"External credit assessment institution source (ECAIs)"
989:. Norderstedt, Germany: Druck und Bingdung. p. 3.
1312:"DBRS: Short-Term and Long-Term Rating Relationships"
27:
Evaluation of the credit risk of a prospective debtor
1172:
cited by authors Herwig Langohr and Patricia Langohr
54:. The credit rating represents an evaluation from a
1209:Cantor, Richard; Packer, Frank (Summer–Fall 1994).
499:Short run benchmark default rates (trigger level)
337:Results focus foremost on economics, specifically
1218:Federal Reserve Bank of New York Quarterly Review
986:Credit Rating and the Impact on Capital Structure
1220:. Federal Reserve Bank of New York. p. 10.
1288:. Council on Foreign Relations. Archived from
1286:"The Credit Rating Controversy. Campaign 2012"
1259:de Servigny, Arnaud; Olivier Renault (2004).
1049:"Singapore leads the world in sovereign risk"
943:List of countries by tax revenue to GDP ratio
496:Long run benchmark default rates (mid value)
8:
379:Credit ratings can address a corporation's
1182:Langohr, Herwig; Patricia Langohr (2010).
483:
476:
92:Least risky countries, Score out of 100
85:
1345:. European Central Bank. Archived from
975:
933:List of countries by government budget
70:credit worthiness, which is done by a
1467:
1465:
7:
938:List of countries by credit rating
25:
1499:
1474:European Supervisory Authorities
1446:European Supervisory Authorities
1421:European Supervisory Authorities
1396:European Supervisory Authorities
1368:Jones, Marc (19 December 2013).
948:List of countries by public debt
76:consumer credit reporting agency
1076:. Euromoney.com. Archived from
1013:. Euromoney.com. Archived from
95:Source: Euromoney country risk
88:Country risk rankings (Q4 2017)
1047:Wright, Chris (9 March 2017).
1:
1249:, (September 1989) pp. 909–22
458:provided in the table below:
1512:Singapore Credit Score Guide
1211:"The credit rating industry"
983:Kronwald, Christian (2009).
1035:"Country Risk Full Results"
398:, the largest of which are
353:Short and long-term ratings
1553:
708:
372:
309:is the credit rating of a
897:
894:
888:
857:
830:
827:
824:
821:
818:
812:
779:
776:
773:
770:
734:
731:
728:
723:
720:
714:
686:
677:
669:
666:
663:
660:
646:
640:
634:
615:
612:
609:
606:
603:
597:
564:
550:
547:
544:
538:
532:
526:
498:
495:
492:
489:
482:
475:
466:
369:Corporate credit ratings
82:Sovereign credit ratings
34:is an evaluation of the
1444:Joint Committee of the
1419:Joint Committee of the
1394:Joint Committee of the
493:EU Credit Quality Step
307:sovereign credit rating
18:Sovereign credit rating
1317:. DBRS. Archived from
867:Extremely speculative
472:
412:probability of default
396:credit rating agencies
62:Credit reporting (or
1284:Alessi, Christopher.
1188:. Wiley. p. 48.
1074:"Country risk survey"
471:
443:European Central Bank
400:Standard & Poor's
381:financial instruments
332:major credit agencies
1508:at Wikimedia Commons
1120:Sinclair, Timothy J.
724:Non-investment grade
56:credit rating agency
771:Highly speculative
661:Lower medium grade
607:Upper medium grade
490:Rating description
96:
93:
90:
1476:(7 October 2016).
1349:on 3 February 2014
1247:Journal of Finance
822:Substantial risks
473:
423:Journal of Finance
375:Bond credit rating
94:
91:
86:
42:(an individual, a
1504:Media related to
1270:978-0-07-141755-6
996:978-3-640-57549-7
924:
923:
878:Default imminent
421:Another study in
339:sovereign default
303:
302:
38:of a prospective
16:(Redirected from
1544:
1503:
1488:
1487:
1485:
1484:
1469:
1460:
1459:
1457:
1456:
1441:
1435:
1434:
1432:
1431:
1416:
1410:
1409:
1407:
1406:
1391:
1385:
1384:
1382:
1380:
1365:
1359:
1358:
1356:
1354:
1339:
1333:
1332:
1330:
1329:
1323:
1316:
1308:
1302:
1301:
1299:
1297:
1281:
1275:
1274:
1256:
1250:
1243:
1237:
1236:
1234:
1228:. Archived from
1215:
1206:
1200:
1199:
1179:
1173:
1170:
1164:
1161:Special Comment:
1157:
1151:
1150:
1148:
1146:
1139:978-0-80147491-0
1116:
1110:
1109:
1107:
1106:
1095:
1089:
1088:
1086:
1085:
1070:
1064:
1063:
1061:
1059:
1044:
1038:
1032:
1026:
1025:
1023:
1022:
1007:
1001:
1000:
980:
487:
480:
464:
463:
291:
273:
253:
235:
217:
199:
181:
161:
141:
121:
97:
21:
1552:
1551:
1547:
1546:
1545:
1543:
1542:
1541:
1517:
1516:
1496:
1491:
1482:
1480:
1471:
1470:
1463:
1454:
1452:
1443:
1442:
1438:
1429:
1427:
1418:
1417:
1413:
1404:
1402:
1393:
1392:
1388:
1378:
1376:
1367:
1366:
1362:
1352:
1350:
1341:
1340:
1336:
1327:
1325:
1321:
1314:
1310:
1309:
1305:
1295:
1293:
1292:on 27 July 2013
1283:
1282:
1278:
1271:
1263:. McGraw-Hill.
1258:
1257:
1253:
1244:
1240:
1232:
1213:
1208:
1207:
1203:
1196:
1181:
1180:
1176:
1171:
1167:
1158:
1154:
1144:
1142:
1140:
1118:
1117:
1113:
1104:
1102:
1097:
1096:
1092:
1083:
1081:
1072:
1071:
1067:
1057:
1055:
1046:
1045:
1041:
1033:
1029:
1020:
1018:
1009:
1008:
1004:
997:
982:
981:
977:
973:
929:
831:not applicable
725:
461:
377:
371:
361:within a given
355:
289:
269:
251:
233:
215:
197:
177:
157:
137:
117:
84:
28:
23:
22:
15:
12:
11:
5:
1550:
1548:
1540:
1539:
1537:Rating systems
1534:
1529:
1519:
1518:
1515:
1514:
1509:
1495:
1494:External links
1492:
1490:
1489:
1461:
1436:
1411:
1386:
1360:
1334:
1303:
1276:
1269:
1251:
1238:
1235:on 2011-04-29.
1201:
1194:
1174:
1165:
1152:
1138:
1111:
1099:"Country Risk"
1090:
1065:
1039:
1027:
1002:
995:
974:
972:
969:
968:
967:
962:
960:Credit history
951:
950:
945:
940:
935:
928:
925:
922:
921:
918:
915:
911:
910:
907:
904:
900:
899:
896:
893:
890:
887:
884:
880:
879:
876:
873:
869:
868:
865:
862:
859:
855:
854:
851:
848:
844:
843:
840:
837:
833:
832:
829:
826:
823:
820:
817:
814:
811:
808:
804:
803:
800:
797:
793:
792:
789:
786:
782:
781:
778:
775:
772:
769:
766:
763:
759:
758:
755:
752:
748:
747:
744:
741:
737:
736:
733:
730:
727:
722:
719:
716:
713:
710:
707:
703:
702:
699:
696:
693:
689:
688:
685:
682:
679:
676:
672:
671:
668:
665:
662:
659:
656:
653:
649:
648:
645:
642:
639:
636:
633:
629:
628:
625:
622:
618:
617:
614:
611:
608:
605:
602:
599:
596:
593:
589:
588:
585:
582:
578:
577:
574:
571:
567:
566:
563:
560:
557:
553:
552:
549:
546:
543:
540:
537:
534:
531:
528:
525:
521:
520:
517:
514:
511:
508:
505:
501:
500:
497:
494:
491:
488:
481:
474:
373:Main article:
370:
367:
354:
351:
316:political risk
301:
300:
297:
292:
287:
283:
282:
279:
274:
267:
263:
262:
259:
254:
249:
245:
244:
241:
236:
231:
227:
226:
223:
218:
213:
209:
208:
205:
200:
195:
191:
190:
187:
182:
175:
171:
170:
167:
162:
155:
151:
150:
147:
142:
135:
131:
130:
127:
122:
115:
111:
110:
109:Overall Score
107:
104:
101:
83:
80:
26:
24:
14:
13:
10:
9:
6:
4:
3:
2:
1549:
1538:
1535:
1533:
1530:
1528:
1527:Credit rating
1525:
1524:
1522:
1513:
1510:
1507:
1506:Credit rating
1502:
1498:
1497:
1493:
1479:
1475:
1468:
1466:
1462:
1451:
1447:
1440:
1437:
1426:
1422:
1415:
1412:
1401:
1397:
1390:
1387:
1375:
1371:
1364:
1361:
1348:
1344:
1338:
1335:
1324:on 2011-04-28
1320:
1313:
1307:
1304:
1291:
1287:
1280:
1277:
1272:
1266:
1262:
1255:
1252:
1248:
1242:
1239:
1231:
1227:
1223:
1219:
1212:
1205:
1202:
1197:
1195:9780470714355
1191:
1187:
1186:
1178:
1175:
1169:
1166:
1162:
1156:
1153:
1141:
1135:
1131:
1127:
1126:
1121:
1115:
1112:
1100:
1094:
1091:
1080:on 2018-10-01
1079:
1075:
1069:
1066:
1054:
1050:
1043:
1040:
1036:
1031:
1028:
1017:on 2018-10-01
1016:
1012:
1006:
1003:
998:
992:
988:
987:
979:
976:
970:
966:
963:
961:
958:
957:
956:
955:
949:
946:
944:
941:
939:
936:
934:
931:
930:
926:
919:
916:
913:
912:
908:
905:
902:
901:
891:
885:
882:
881:
877:
874:
871:
870:
866:
863:
860:
856:
852:
849:
846:
845:
841:
838:
835:
834:
815:
809:
806:
805:
801:
798:
795:
794:
790:
787:
784:
783:
767:
764:
761:
760:
756:
753:
750:
749:
745:
742:
739:
738:
717:
711:
705:
704:
700:
697:
694:
691:
690:
683:
680:
674:
673:
657:
654:
651:
650:
643:
637:
631:
630:
626:
623:
620:
619:
600:
594:
591:
590:
586:
583:
580:
579:
575:
572:
569:
568:
561:
558:
555:
554:
541:
535:
529:
523:
522:
518:
515:
512:
509:
506:
503:
502:
486:
479:
470:
465:
462:
459:
455:
451:
448:
444:
439:
435:
431:
429:
424:
419:
415:
413:
409:
408:Fitch Ratings
405:
401:
397:
393:
389:
386:
382:
376:
368:
366:
364:
360:
352:
350:
348:
344:
340:
335:
333:
329:
324:
319:
317:
312:
308:
298:
296:
293:
288:
285:
284:
280:
278:
275:
272:
268:
265:
264:
260:
258:
255:
250:
247:
246:
242:
240:
237:
232:
229:
228:
224:
222:
219:
214:
211:
210:
206:
204:
201:
196:
193:
192:
188:
186:
183:
180:
176:
173:
172:
168:
166:
163:
160:
156:
153:
152:
148:
146:
143:
140:
136:
133:
132:
128:
126:
123:
120:
116:
113:
112:
108:
105:
102:
99:
98:
89:
81:
79:
77:
73:
72:credit bureau
69:
65:
60:
57:
53:
49:
45:
41:
37:
33:
32:credit rating
19:
1481:. Retrieved
1453:. Retrieved
1439:
1428:. Retrieved
1414:
1403:. Retrieved
1389:
1377:. Retrieved
1373:
1363:
1351:. Retrieved
1347:the original
1337:
1326:. Retrieved
1319:the original
1306:
1294:. Retrieved
1290:the original
1279:
1260:
1254:
1246:
1241:
1230:the original
1217:
1204:
1184:
1177:
1168:
1160:
1155:
1145:21 September
1143:. Retrieved
1124:
1114:
1103:. Retrieved
1101:. ambest.com
1093:
1082:. Retrieved
1078:the original
1068:
1056:. Retrieved
1052:
1042:
1030:
1019:. Retrieved
1015:the original
1005:
985:
978:
965:Credit score
954:Individuals:
953:
952:
726:speculative
460:
456:
452:
440:
436:
432:
428:basis points
422:
420:
416:
378:
363:time horizon
356:
343:trade credit
336:
323:country risk
320:
304:
270:
178:
158:
138:
118:
87:
68:individual's
67:
64:credit score
61:
31:
29:
898:In default
565:High grade
519:Short-term
239:Netherlands
165:Switzerland
103:Rank Change
36:credit risk
1521:Categories
1483:2019-06-21
1455:2019-06-21
1430:2019-06-21
1405:2019-06-21
1379:21 January
1353:21 January
1328:2013-06-28
1128:. Ithaca,
1105:2011-08-08
1084:2018-01-16
1021:2018-01-16
971:References
513:Short-term
507:Short-term
390:such as a
347:A. M. Best
221:Luxembourg
52:defaulting
1226:0147-6580
1053:Euromoney
709:Not Prime
516:Long-term
510:Long-term
504:Long-term
328:Singapore
311:sovereign
295:Australia
125:Singapore
1122:(2005).
927:See also
447:haircuts
388:security
44:business
1374:Reuters
404:Moody's
359:default
345:risk).
257:Finland
185:Denmark
106:Country
48:company
1532:Credit
1296:29 May
1267:
1224:
1192:
1136:
1058:26 May
993:
735:12.4%
613:0.25%
542:Prime
299:82.18
281:82.98
277:Canada
243:83.76
225:83.85
207:85.59
203:Sweden
189:85.67
169:87.64
149:87.66
145:Norway
40:debtor
1322:(PDF)
1315:(PDF)
1233:(PDF)
1214:(PDF)
853:CCC−
732:7.5%
701:BBB−
670:3.0%
667:1.0%
616:1.3%
551:1.2%
548:0.1%
383:i.e.
321:The "
261:83.1
129:88.6
1381:2014
1355:2014
1298:2013
1265:ISBN
1222:ISSN
1190:ISBN
1147:2013
1134:ISBN
1060:2022
991:ISBN
850:CCC−
847:Caa3
842:CCC
836:Caa2
828:34%
816:CCC+
810:CCC+
807:Caa1
780:35%
777:20%
757:BB−
695:BBB−
692:Baa3
675:Baa2
658:BBB+
655:BBB+
652:Baa1
587:AA−
533:A-1+
406:and
392:bond
385:debt
100:Rank
839:CCC
802:B−
754:BB−
751:Ba3
746:BB
740:Ba2
718:BB+
712:BB+
706:Ba1
698:A-3
687:F3
684:BBB
681:BBB
678:P-3
647:F2
641:A-2
635:P-2
598:A-1
584:AA−
581:Aa3
576:AA
570:Aa2
562:AA+
559:AA+
556:Aa1
539:F1+
536:AAA
530:AAA
527:P-1
524:Aaa
334:.
286:10
74:or
1523::
1464:^
1448:.
1423:.
1398:.
1372:.
1216:.
1130:NY
1051:.
920:/
909:D
906:SD
892:RD
886:RD
864:CC
861:CC
858:Ca
825:6
799:B−
796:B3
791:B
785:B2
774:5
768:B+
765:B+
762:B1
743:BB
729:4
664:3
644:A−
638:A−
632:A3
627:A
621:A2
610:2
604:F1
601:A+
595:A+
592:A1
573:AA
545:1
414:.
402:,
318:.
305:A
290:▲1
266:9
252:▲4
248:8
234:▼1
230:7
216:▼1
212:6
198:▲2
194:5
174:4
154:3
134:2
114:1
78:.
46:,
30:A
1486:.
1458:.
1433:.
1408:.
1383:.
1357:.
1331:.
1300:.
1273:.
1198:.
1149:.
1108:.
1087:.
1062:.
1024:.
999:.
917:D
914:/
903:/
895:D
889:D
883:C
875:C
872:C
819:C
813:C
788:B
721:B
715:B
624:A
426:"
271:-
179:-
159:-
139:-
119:-
20:)
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