credit rating

credit rating
n.
A number calculated by examining a person’s assets, liabilities, and financial history that tells a lender how likely that person is to pay back a loan.

The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. . 2008.


credit rating
The rating of corporate securities by credit rating agencies (rating agency) such as Standard & Poor's and Moody's according to the quality of the borrower and its capacity to pay interest and repay the principal on the bonds. Ratings range from AAA (extremely strong capacity to pay interest and repay principal) to D (securities in default).
+ A credit rating is an independent opinion on a company's ability to pay its debts on a timely basis. A rating may be assigned to a debtor in respect of either:
• Its general creditworthiness.
• A specific debt obligation, such as a bond issue, euro medium-term note programme, euro commercial paper programme, derivatives or bank loan.
Ratings, which may be long or short-term, are issued by independent rating agencies. In reaching their credit judgments, rating agencies assess the relevant factors relating to:
• The debtor.
• The debtor's industry.
• The debtor's geographic region.
Specific debt ratings take account of the terms and conditions relating to the debt, the creditworthiness of any guarantor or insurer of the debt and any other credit enhancement. Such ratings are often obtained for securitised or asset-backed bond issues to provide independent assurance of the issue's creditworthiness.
+ credit rating
USA
The rating given to a specific debt issue, bank loan or borrower by a credit rating agency. These ratings are based on the creditworthiness of the issuer of the debt or borrower of the loan. Rating scales vary; the most popular scale uses (in order of increasing risk) ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, with the additional rating D for debt already in arrears. Government bonds and bonds issued by government sponsored enterprises are often considered to be in a zero-risk category above AAA, and categories like AA and A may sometimes be split into finer subdivisions like "AA-" or "AA+". Bonds rated BBB- and higher are called investment grade bonds. Bonds rated lower than investment grade on their date of issue are called speculative grade bonds, derisively referred to as junk bonds.
Similarly, loans and borrowers rated BBB- and higher are called investment grade loans and borrowers, respectively. Loans rated lower than investment grade on their date of issue are called leveraged loans.
Related links
credit rating

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Игры ⚽ Поможем написать реферат

Look at other dictionaries:

  • Credit rating — of governments around the world by Standard Poor s:   AAA …   Wikipedia

  • credit rating — Credit reporting agencies collect information about consumers financial affairs and sell this information to their clients. Credit ratings are set by creditors who pass this information to the reporting agencies. It consists of a nine point… …   Glossary of Bankruptcy

  • credit rating — ☆ credit rating n. the rating given to an individual or business firm as a credit risk, based on past records of debt repayment, financial status, etc …   English World dictionary

  • credit rating — credit ,rating noun count financial information about someone that a bank or store uses for deciding whether to lend them money or give them CREDIT …   Usage of the words and phrases in modern English

  • credit rating — credit .rating n a judgment made by a bank or other company about how likely a person or business is to pay their debts …   Dictionary of contemporary English

  • credit rating — An evaluation of an individual s or company s ability to repay obligations or its likelihood of not defaulting See: creditworthiness. Bloomberg Financial Dictionary * * * credit rating credit rating ➔ rating * * *    Credit ratings measure a… …   Financial and business terms

  • Credit Rating — von Dr. Oliver Everling und Stephanie Gareis Rating ist eine Methode zur Einstufung von Sachverhalten, Gegenständen oder Personen. Meist wird unter Rating das Ergebnis des Beurteilungsverfahrens verstanden. Dies ist eine entsprechend der zugrunde …   Lexikon der Economics

  • credit rating — UK / US noun [countable] Word forms credit rating : singular credit rating plural credit ratings business financial information about someone that a bank or shop uses for deciding whether to lend them money or to give them credit …   English dictionary

  • credit rating — noun an estimate, based on previous dealings, of a person s or an organization s ability to fulfill their financial commitments • Syn: ↑credit • Hypernyms: ↑estimate, ↑estimation, ↑approximation, ↑idea * * * noun, pl ⋯ ratings [count] : a score… …   Useful english dictionary

  • credit rating — N SING Your credit rating is a judgement of how likely you are to pay money back if you borrow it or buy things on credit …   English dictionary

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”