rating agency

Credit Rating Agency

A company that provides investors with assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. A high rating indicates low risk and may therefore encourage investors to buy a security. Additionally, banks may only invest in securities with a high rating from two or more credit rating agencies. The SEC recognizes 10 firms as credit rating agencies; Fitch, S&P, and Moody's are the three most prominent. However, the methods of credit ratings agencies have been subject to criticism. For example, most agencies gave high-risk mortgage-backed securities top ratings until they defaulted at the collapse of the housing bubble.

Rating Service

A company that evaluates preferred stocks and debt securities based on the likelihood of default. The ratings service provides an objective rating to the security; the rating is higher when the likelihood of default is lower. There are three main ratings services: Moody's, Fitch, and Standard & Poor's. Companies issuing new preferred stocks or debt securities pay one or more of the ratings services to have their securities rated. Banks are not allowed to invest in securities with ratings below a certain level. See also: Investment-grade, Junk.

rating agency

A company that evaluates the creditworthiness and strength of other companies and assigns a score to them,such as A,AA,and so on.

References in periodicals archive ?
43234 (hereinafter, the Ordinance) the long-term solvency rating of credit institutions by classification of at least one rating agency (Fitch-Ratings, Standard & Poors, Moodys Investors Service) shall be no lower than the sovereign credit rating of the Russian Federation in corresponding currency assigned by the respective rating agency downgraded by two notches;
PESHAWAR -- The two leading credit rating agencies Pakistan Credit Rating Agency Limited (PACRA) and JCR-VIS Credit Rating Company Limited (JCR-VIS) have maintained long term and short term entity ratings of The Bank of Khyber (BoK) at "A" (Single A) and "A1" (A One), respectively for the period ended June 30, 2016.
It has chapters considering private credit risk, sovereign credit risk, regulatory capture and the role that a public credit rating agency could perform in stabilising an otherwise unstable situation.
A Russian-Chinese rating agency will be created which will use the same tools [and] criteria to evaluate investment projects of countries and regions that are used by existing rating agencies," the Minister was quoted by RIA Novosti as saying.
com)-- In August 2010, Michael formally retired from Moody's Investors Service, completing a 25-year career with the US Credit Rating Agency.
JUST 10 days ago, George Osborne desperately tried to claim that a statement from one credit rating agency meant the world had confidence in his policies, even though Britain is one of just two G20 countries in a double-dip recession.
Chidambaram on Wednesday rejected the downgrading warning by rating agency Standard and Poor's, and expressed confidence that Indian economy will be on a high growth path beginning this year
The vote has been moved to 19 June as Socialist and EPP deputies try to work out their differences, which centre on whether to set up a European rating agency - a proposal forcing banks and companies to rotate the agencies they use and how government debt should be rated.
incorrectg rating of France by the rating agency Standard and Poor's as
Stress tests are an evaluation method that entails a rating agency assessing credit-worthiness by posing different worst-case economic scenarios to determine the vulnerability of the company.
However," she continued, "where a rating agency has disseminated their ratings to a select group of investors rather than to the public at large"--as was the case in Abu Dhabi Commercial Bank--"the rating agency is not afforded the same protection.