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What is a credit rating?

What is a credit rating?

A credit rating is given to a company or debt issue after a disinterested third party evaluates the strength or cash flow
What is an A-note?

What is an A-note?

An A-note describes a slice of the top tranche of an asset-backed security. Asset-backed securities include Credit Debt
AAA/Aaa — credit rating

AAA/Aaa — credit rating

AAA/Aaa is the highest rating a bond issue or company can get. In the aftermath of the 2008 financial crisis and...
AA+/Aa1 — credit rating

AA+/Aa1 — credit rating

On the spectrum of creditworthiness ratings that come from firms like Moody’s and S&P, a rating of AA+/Aa1 is very good
A+/A1 — credit rating

A+/A1 — credit rating

A+/A1 is a few ratings down from the top, which is AAA/Aaa. This can be somewhat misleading or confusing to investors
A/A2 — credit rating

A/A2 — credit rating

The A/A2 rating is considered Upper Medium Investment Grade. The reason there are two ratings separated by a slash...
A-/A3 — credit rating

A-/A3 — credit rating

The A-/A3 rating is considered Investment Grade, but it is getting closer to the Junk Bond range
BB+/Ba1 — credit rating

BB+/Ba1 — credit rating

This rating is the highest non-investment grade category that the ratings agencies will give to a bond...
BB/Ba2 — credit rating

BB/Ba2 — credit rating

A bond rated BB/Ba2 is just below investment grade and is a somewhat speculative financial instrument
BB-/Ba3 — credit rating

BB-/Ba3 — credit rating

The BB-/Ba3 rating is given to bonds and companies who have a moderate risk of default
B+/B1 — credit tating

B+/B1 — credit tating

B+/B1 is within the range of ratings given to High Yield Bonds, also known as Junk bonds
B/B2 — credit rating

B/B2 — credit rating

B2/B ratings are the 15th ratings down the scale from the top. A bond in the B range has about a 20% chance of defaulting
B-/B3 — credit rating

B-/B3 — credit rating

The rating in question here, B3/B-, is on the low end of the “Highly Speculative” subset. Risk of defaulting is over 20%