[Moody’s Ratings are below.]
STANDARD and POOR’s DEBT
RATINGS
AAA
An obligor rated ‘AAA’ has EXTREMELY STRONG
capacity to meet its financial commitments. ‘AAA’ is the highest Issuer Credit
Rating assigned by Standard & Poor’s.
AA
An obligor rated ‘AA’ has VERY STRONG capacity
to meet its financial commitments. It differs from the highest rated obligors
only in small degree.
A
An obligor rated ‘A’ has STRONG capacity to meet
its financial commitments but is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligors in
higher-rated categories.
BBB
An obligor rated ‘BBB’ has ADEQUATE capacity to
meet its financial commitments. However, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity of the
obligor to meet its financial commitments.
Obligors rated ‘BB’, ‘B’, ‘CCC’, and ‘CC’ are regarded as having significant
speculative characteristics. ‘BB’ indicates the least degree of speculation and
‘CC’ the highest. While such obligors will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major exposures to adverse conditions.
BB
An obligor rated ‘BB’ is LESS VULNERABLE in the
near term than other lower-rated obligors. However, it faces major ongoing
uncertainties and exposure to adverse business, financial, or economic
conditions which could lead to the obligor’s inadequate capacity to meet its
financial commitments. B An obligor rated ‘B’ is MORE VULNERABLE than the
obligors rated ‘BB’, but the obligor currently has the capacity to meet its
financial commitments. Adverse business, financial, or economic conditions will
likely impair the obligor’s capacity or willingness to meet its financial
commitments.
B
An obligation rated ‘B’ is more vulnerable to nonpayment
than obligations rated ‘BB’, but the obligor currently has the capacity to meet
its financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor’s capacity or willingness to meet its
financial commitment on the obligation.
CCC
An obligor rated ‘CCC’ is CURRENTLY VULNERABLE,
and is dependent upon favorable business, financial, and economic conditions to
meet its financial commitments.
CC
An obligor rated ‘CC’ is CURRENTLY
HIGHLY-VULNERABLE.
Plus (+) or minus(-) The ratings from ‘AA’ to
‘CCC’ may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
C
A subordinated debt or
preferred stock obligation rated ‘C’ is CURRENTLY HIGHLY VULNERABLE to
nonpayment. The ‘C’ rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action taken, but payments on this
obligation are being continued. A ‘C’ also will be assigned to a preferred
stock issue in arrears on dividends or sinking fund payments, but that is
currently paying.
R
An obligor rated ‘R’ is under regulatory
supervision owing to its financial condition. During the pendency of the
regulatory supervision the regulators may have the power to favor one class of
obligations over others or pay some obligations and not others. Please see
Standard & Poor’s issue credit ratings for a more detailed description of
the effects of regulatory supervision on specific issues or classes of
obligations.
SD
and D
An obligor rated ‘SD’ (Selective Default) or ‘D’
has failed to pay one or more of its financial obligations (rated or unrated)
when it came due. A ‘D’ rating is assigned when Standard & Poor’s believes
that the default will be a general default and that the obligor will fail to
pay all or substantially all of its obligations as they come due. An ‘SD’
rating is assigned when Standard & Poor’s believes that the obligor has
selectively defaulted on a specific issue or class of obligations but it will
continue to meet its payment obligations on other issues or classes of
obligations in a timely manner. Please see Standard & Poor’s issue credit
ratings for a more detailed description of the effects of a default on specific
issues or classes of obligations.
N.R.
An issuer designated N.R. is not rated.
Public
Information Ratings
Ratings with a ‘pi’ subscript are based on an
analysis of an issuer’s published financial information, as well as additional
information in the public domain. They do not, however, reflect in-depth
meetings with an issuer’s management and are therefore based on less
comprehensive information than ratings without a ‘pi’ subscript. Ratings with a
‘pi’ subscript are reviewed annually based on a new year’s financial
statements, but may be reviewed on an interim basis if a major event occurs
that may affect the issuer’s credit quality.
Outlooks are not provided for ratings with a
‘pi’ subscript, nor are they subject to potential CreditWatch listings. Ratings
with a ‘pi’ subscript generally are not modified with ‘+’ or ‘-‘ designations.
However, such designations may be assigned when the issuer’s credit rating is
constrained by sovereign risk or the credit quality of a parent company or
affiliated group.
MOODY’s DEBT RATINGS
Aaa
Bonds and preferred stock which
are rated Aaa are judged to be of the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa
Bonds and preferred stock which
are rated Aa are judged to be of high quality by all standards. Together with
the Aaa group they comprise what are generally known as high-grade bonds. They
are rated lower than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than the Aaa securities.
A
Bonds and preferred stock which
are rated A possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa
Bonds and preferred stock which
are rated Baa are considered as medium-grade obligations (i.e., they are
neither highly protected nor poorly secured). Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba
Bonds and preferred stock which
are rated Ba are judged to have speculative elements; their future cannot be
considered as well-assured. Often the protection of interest and principal
payments may be very moderate, and thereby not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes bonds
in this class.
B
Bonds and preferred stock which
are rated B generally lack characteristics of the desirable investment. Assurance
of interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small.
Caa
Bonds and preferred stock which
are rated Caa are of poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca
Bonds and preferred stock which
are rated Ca represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings.
C
Bonds and preferred stock which
are rated C are the lowest rated class of bonds, and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.
Moody’s assigns ratings to
individual debt securities issued from medium-term note (MTN) programs, in
addition to indicating ratings to MTN programs themselves. Notes issued under
MTN programs with such indicated ratings are rated at issuance at the rating
applicable to all pari passu notes issued under the same program, at the
program’s relevant indicated rating, provided such notes do not exhibit any of
the characteristics listed below. For notes with any of the following
characteristics, the rating of the individual note may differ from the
indicated rating of the program:
1) Notes containing features which
link the cash flow and/or market value to the credit performance of any third
party or parties.
2) Notes allowing for negative
coupons, or negative principal.
3) Notes containing any provision
which could obligate the investor to make any additional payments.
Market participants must determine
whether any particular note is rated, and if so, at what rating level. Moody’s
encourages market participants to contact Moody’s Ratings Desks directly if
they have questions regarding ratings for specific notes issued under a
medium-term note program.
Note:
Moody’s applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.
The above information
is from the websites of:
Moody’s:
and Standard and
Poors:
http://www2.standardandpoors.com/