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Standard & Poor's rating scale

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Magazine Issue: 
China’s awakening sends shockwaves around the world [3]
Magazine date: 
Oct 2018
Standard & Poor’s

Standard & Poor’s

  • American firm
  • Date of creation : 1860
  • Turnover: 6.063 billion USD
  • Total assets : 9.425 billion USD
  • Net income : 1.638 billion USD
  • Total staff: 20 400 staff members worldwide
  • Presence in 28 countries

Standard & Poor’s rating scale

Standard & Poor's uses a scale divided into two categories:

  • The first category, "Investment", includes ratings ranging from AAA to BBB-. It groups together the ratings given to companies considered financially solid.
  • The second category "Speculative" ranges from BB + to D. It concerns companies at risk.

Rating and grades

  • The ratings are 12 in number. They range from AAA to D.
  • The grades or notches/ranks specify the positions within a rating. These grades are represented by the signs + or - and are only assigned to ratings between AA and CCC.
    Example BBB-, BB + and BB-.
GradeRatingComments
InvestmentAAA
Highest rating. Extremely strong capacity to meet financial commitments
AA
Very strong capacity to meet financial commitments
A
Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances
BBB
Adequate capacity to meet financial commitments, but more subject to adverse economic conditions
BBB-
Considered lowest investment-grade by market participants
SpeculativeBB+
Considered highest speculative-grade by market participants
BB
Less vulnerable in the near-term but faces major ongoing uncertainties to
adverse business, financial and economic conditions
B
More vulnerable to adverse business, financial and economic conditions
but currently has the capacity to meet financial commitments
CCC
Currently vulnerable and dependent on favorable business, financial and
economic conditions to meet financial commitments
CC
Highly vulnerable; default has not yet occurred, but is expected to be a virtual certainty
C
Currently highly vulnerable to non-payment, and ultimate recovery is expected to be lower than that of higher rated obligations
D
Payment default on a financial commitment or breach of an imputed promise; also used when a bankruptcy petition has been filed or similar action taken

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Thu, 11/10/2018 - 12:51

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[3] https://www.atlas-mag.net/en/issue/china-s-awakening-sends-shockwaves-around-the-world
[4] https://www.atlas-mag.net/en/article/am-best-rating-scale
[5] https://www.atlas-mag.net/en/article/rating-agencies-0