A- — S&P / Fitch
A3 — Moody’s
If a company or debt issue has a rating of A-/A3, it means that S&P and Fitch have given it an A- and Moody’s has given it an A3 rating. They have their own symbology for their ratings system but these are at the same level on both scales: these ratings are at the 6th or 7th degree from the top possible ratings, which is AAA/Aaa.
The top ranking is not always available, since it may depend on the credit rating of the country in which the company is based, so this is why we say 6th or 7th. This is the lowest rating available in the A-range.
At this level and higher, if a debt cash flow is put into an asset-backed security, it would be part of the Class A tranche, which has almost no risk of default, ostensibly.
In terms of Investment Grade vs. Junk Bonds, an issue or company with the A-/A3 rating would still have a buffer between this level and the Junk Bond rating, since Investment Grade debt goes all the way down 3 levels to Baa3/BBB-.
Another term for the A-/A3 rating is Upper Medium grade.
The ratings institutions are not bullet-proof, however, and have been accused of negligence and possible conflicts of interest due to the high ratings were given to several companies in the last 15 years that were upheld until the day the highly-rated companies declared bankruptcy.
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