Quick Answer: What is Moody’s investment grade?

What is Moody’s rating scale?

What is Moody’s rating scale? The rating scale, running from a high of Aaa to a low of C, comprises 21 notches. It is divided into two sections, investment grade and speculative grade. The lowest investment-grade rating is Baa3.

What is an investment-grade credit rating?

A security has an investment grade rating if it has a rating that falls within the range of Aaa to Baa3 from Moody’s or AAA to BBB- for Standard & Poor’s. The company’s securities have investment grade ratings if it has a strong capacity to meet its financial commitments.

Is Moody’s Ba1 investment-grade?

What Are Ba1/BB+? Ba1/BB+ are rating designations by Moody’s Investor Service and S&P Global Ratings, respectively, for a credit issue or an issuer of credit that signify higher degrees of default risk on the agencies’ rating spectrums. Ba1/BB+ sits just below investment-grade ratings.

Is BBB a good credit rating?

“AAA” and “AA” (high credit quality) and “A” and “BBB” (medium credit quality) are considered investment grade. Credit ratings for bonds below these designations (“BB,” “B,” “CCC,” etc.) are considered low credit quality, and are commonly referred to as “junk bonds.”

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Is a Ba3 rating good?

Ba2/BB are credit ratings just below investment grade, considered more speculative. Ba2 falls above the Ba3 rating and below Ba1, while BB is above BB- and below BB+. Moody’s uses the Ba2 rating, while S&P and Fitch use BB.

Credit ratings
MOODY’s S&P
Ba3 BB-
B1 B+
B2 B Highly speculative

What are the 4 credit rating companies?

The Big Three credit rating agencies are S&P Global Ratings (S&P), Moody’s, and Fitch Group. S&P and Moody’s are based in the US, while Fitch is dual-headquartered in New York City and London, and is controlled by Hearst.

What does BB rating mean?

The BB credit rating means that there is a higher probability for default of a debt issuer or a debt instrument. This is the grade by S&P and Fitch while the respective grade by Moody’s scale is Ba2. The BB is the second-best non-investment grade.

Which companies have AAA credit rating?

As it stands, only two U.S. corporations have a AAA rating as of February 2020: Microsoft (MSFT) and Johnson & Johnson (JNJ).

Is BBB a junk bond?

Bonds with a rating of BBB- (on the Standard & Poor’s and Fitch scale) or Baa3 (on Moody’s) or better are considered “investment-grade.” Bonds with lower ratings are considered “speculative” and often referred to as “high-yield” or “junk” bonds.

What is Baa3?

Baa3. The lowest rating of investment grade Moody’s Long-term Corporate Obligation Rating. Obligations rated Baa3 are subject to moderate credit risk. They are considered medium grade and as such may possess certain speculative characteristics.

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Is Fitch BB+ investment grade?

A bond is considered investment grade or IG if its credit rating is BBB- or higher by Fitch Ratings or S&P, or Baa3 or higher by Moody’s, the so-called “Big Three” credit rating agencies.

What does it mean when a bond has a relatively high credit rating?

A bond rating is a grade given to a bond by a rating service that indicates its credit quality. … Generally, a “AAA” high-grade rated bond offers more security and lower profit potential (lower yield) than a “B-” rated speculative bond.