S&P Rating
What is the S&P Rating?
The S&P Rating is a credit rating Standard & Poor’s assigned to a specific bond. It reflects the issuer's ability to fulfill its debt obligations regarding this specific financial instrument over a long period, typically a year or more. Ratings range from AAA, indicating exceptional reliability, to D, which denotes a default on obligations.
Why is the S&P Rating important?
The S&P Rating is crucial because it gives investors and analysts a key indicator of the issuer's creditworthiness. A high rating indicates low credit risk, while a low rating may signal potential financial troubles and an increased risk of default.
Rating scale:
- AAA — Exceptional creditworthiness.
- AA, A — Strong creditworthiness, but susceptible to adverse conditions.
- BBB — Adequate creditworthiness, but more sensitive to economic conditions.
- BB, B — Speculative creditworthiness, potential financial difficulties.
- CCC, CC, C — High likelihood of default, dependent on favorable conditions.
- D — Default.
- NR — Not Rated.