Rating equivalence between the ‘Big Three’

A credit rating is an opinion, expressed on an alphanumeric scale, on the creditworthiness of a debt issuer, i.e. its ability to honour current and future obligations. Each credit rating agency (CRA) uses its own rating scale. The best-known scale is that of Standard and Poor’s, where the top ranking is AAA, and the worst is D (for ‘in default’). The one used by Fitch is almost identical to that of Standard and Poor’s (S&P), but Moody’s rating scale runs from Aaa (highest) to C. The financial products with the lowest ratings are generally known as ‘junk’. In addition, ratings are often given an indication on the outlook in form of a ‘+’ or ‘-‘, thus hinting at a possible future rate change in the short to medium term.