Rating


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Related to Rating: credit rating

Rating

1. See: Bond rating.

2. See: Credit score.

rating

The grading of a security with respect to a characteristic or a set of characteristics such as safety and growth. Rating is most often applied to debt securities, which are graded according to the issuer's ability to pay interest and principal when due. See also bond rating, downgrading, Moody's Investment Grade, not rated, stock rating, upgrading.

Rating.

Rating means evaluating a company, security, or investment product to determine how well it meets a specific set of objective criteria.

For example, a bond issue may be rated along a spectrum from highest quality investment grade to speculative, or from AAA to D.

Rating typically affects the interest rate a fixed-income security must pay to attract investors, forcing lower-rated bond issuers to pay higher rates. Other investors may shun low-rated investments entirely, unwilling to take the risk that the issuer might default. However, ratings are not infallible, even in industries, such as insurance, that are regularly scrutinized.

Rating differs from ranking, which assigns the relative standing of two or more similar items in relation to each other.

References in periodicals archive ?
05 billion) due 2010 and 2013: To 'BBB+(bra)' Rating Outlook Stable, from 'BBB(bra)' Rating Outlook Stable
The average annual frequency of a Fitch-rated structured finance security maintaining its rating or experiencing an upgrade over this historical period was consistently high across each of the major asset classes - ABS, RMBS, CMBS and CDOs - and remained high over multiple-year horizons.
CHICAGO -- Fitch Ratings has revised the Insurer Financial Strength Ratings of Health Net, Inc.
Withdrawal of 'BBq' IFS rating and assignment of 'BBB+' IFS rating:
Foreign Currency; 'BB-'; 'BB', Rating Outlook Positive
The overall Stable Rating Outlook for state ratings reflects a favorable economic picture and continued positive revenue performance.
Among the significant tables in the study are the following: Best's Cumulative Average Impairment Rates (for 15 years), Best's One-Year Rating Transition Matrix and Best's Implied Impairment Rates of Holding Company Senior Unsecured Debt (for 15 years).
Greater details on Fitch's new guidelines governing notching of issue ratings relative to the IDR, as well as the notching between Insurer Financial Strength Ratings (IFS) at an operating company level and debt ratings at a holding company level are available in the noted methodology report.
The following ratings experienced upward revisions upon implementation of the new guidelines:
All rating changes made today in implementing the new rating guidelines are being designated as 'revisions', as opposed to upgrades or downgrades.
The long-term issuer rating met the demand of various counterparties that required a general credit assessment of institutions they dealt with in a variety of transactions.
Proposals by the European Parliament's Committee on Economic and Monetary Affairs to establish a European Registration Authority for rating agencies under the auspices of the Committee of European Securities Regulators (CESR) may be far ahead of the curve.