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Ratings are corporate credit scores. Like any other lender, investors don't want to give money to those likely to default. Additionaly, investors will want more interest for loans that have a higher chance of defaulting.
Their are 3 major rating agencies - Moody's, Standard and Poor's, and Fitch. The chart below lists the available grades and what they indicate.
| Moody's |
S&P / Fitch |
Grade |
Risk |
| Aaa |
AAA |
Investment |
Highest Quality |
| Aa |
AA |
Investment |
High Quality |
| A |
A |
Investment |
Strong |
| Baa |
BBB |
Investment |
Medium Grade |
| Ba |
BB |
Junk |
Speculative |
| B |
B |
Junk |
Speculative |
| Caa |
CCC |
Junk |
Speculative |
| Ca |
CC |
Junk |
Highly Speculative |
| C |
C |
Junk |
Highly Speculative |
| D |
* |
Junk |
In Default |
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