A+ — S&P / Fitch
A1 — Moody’s
In the spectrum of ratings given to bonds and companies, A+/A1 is a very good rating to get, even if it is the 5th rating from the top.
The Big Three ratings institutions, which are Fitch, Moody’s, and S&P, give ratings for creditworthiness after inspecting the books of companies who issue bonds. There are credit ratings given for companies and credit ratings given to bond issues.
Remember, a bond is a debt that the company repays over time to the investors, whose capital is used to fund operations and expansion. The reason there are two ratings with a slash in the middle is because while S&P and Fitch use the same symbols, Moody’s has a different system. The ratings of all three will usually be about the same, but not in all cases, due to different methodology and algorithms.
A+/A1 is a few ratings down from the top, which is AAA/Aaa.
This can be somewhat misleading or confusing to investors or those evaluating an insurance company. If it is advertised an A+ rating, the average investor or consumer might think that this is the best rating possible, like an A+ grade in school, when in fact it is the 5th best rating available.
Companies and bonds with this rating are considered Upper Middle Investment Grade and have a very low chance of defaulting on their obligations. Skeptics point out that the ratings institution have been too forgiving in the past, however, and it is important to do some research independently.
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