Credit quality


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Credit quality

A measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA, and so forth. The lower the rating, the higher the probability of default.

Credit Quality

A measure of the likelihood of default, especially by a bond issuer. Credit ratings agencies determine credit quality in order to provide bond ratings; they may change these from time to time. FICO scores are measures of the credit quality of individuals. See also: Investment-grade, Junk.
References in periodicals archive ?
Fitch initially rated the funds 'AA+f(twn)' to reflect potential changes in composition; that is, credit quality deterioration.
The new credit quality unit will reinforce and fortify these relationships."
Compared with the third quarter of 2009, the MAR Index is the same with a value of 102, indicating no change in renter credit quality.
Additionally, poorly underwritten loans originated in 2006 and 2007 continue to have a negative impact on the overall credit quality of the portfolio.
Given the small size and high credit quality of the exposures, Fitch does not view holdings of these securities as posing credit concerns at this time.
'The main drivers of credit quality will be industry-specific fundamentals as well as the companies' ability to improve liquidity profiles and to extend debt maturities, which have remained comparatively short and clustered,' explains Philipp Lotter, Dubai-based senior VP in Moody's Corporate Finance Group and co-author of this report.
THE credit quality of the Indian companies is beginning to stabilise, but the recovery path may not be necessarily smooth.
Further improvement in the ratings on CLOs is possible if pools can maintain steady credit quality and the repayment of underlying loans resumes its speed and continues to contribute to more notes being redeemed and increasing credit enhancement.
The Moody's report, Moody's Rating Actions, Reviews and Outlooks: Quarterly Update--Fourth Quarter 2006, noted that the general improvement in global credit quality seen in the first three quarters of 2006 slowed during the fourth quarter, as the number of credit-rating downgrades were roughly equal to the number of upgrades.
The review, which encompassed credits of at least $20 million that are shared by three or more financial institutions, also found that most industries exhibit much improved credit quality from peak problem levels experienced only a few years ago.