USE OF SYMBOLS in credit rating

CS 1454 views 4 replies

Hello everyone can any one tell me why + or - symbols are attached to instruments while assigning credit rating to them ?

 

is this to convey that an instrument with "+" sign have higher rating compared to instrument with " -" sign or vice versa ??? if it is correct then it is always be the same ???  for eg a instument with "AA -" rating is stonger than rating in a lower category such as "A +" or what ???

Replies (4)

 

The sign of + (plus) or – (minus) with  rating symbols indicates their relative position within the rating categories concerned.

Plus sign to distinguish the strongest credits in that category.

yes u r correct A instument with "AA -" rating is stonger than rating in a lower category such as "A +".

for eg.

Standard & Poor's investment grade ratings in order from the highest to the lowest are: AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB and BBB-.

Standard & Poor's non-investment grade ratings in order from the highest to the lowest are: BB+, BB, BB-, B+, B, B-, CCC+, CCC, CCC- CC, C, D and SD.

Thanks very much  Richa mam for ur reply and explanation.......

Originally posted by : CS Richa Sharma

 

Standard & Poor's investment grade ratings in order from the highest to the lowest are: AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB and BBB-.


Standard & Poor's non-investment grade ratings in order from the highest to the lowest are: BB+, BB, BB-, B+, B, B-, CCC+, CCC, CCC- CC, C, D and SD.

 

CORRECT...

 

Dear Jeet, would request you to check some available red herring prospectus on internet and read the comment given by the credit rating agencies like CRISIL etc....this will help you to understand the concept in a bit practical way....search google for RHPs.

 

All the Best

Thanks Ankur sir........ i will try to google this ..........


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