Fitch Ratings Scale

Fitch Ratings Inc. in an international credit rating agency.

Together with Moody's and Standard & Poors, Fitch is one of the largest credit rating agencies in the world.

Fitch Rating was founded in 1913.

Credit rating agencies make risk assessments of financial instruments like:

• Government bonds
• Big corporations bonds
• Preferred stocks
• Mortgage backed instruments

Credit Ratings give an asessment to financial instruments. For example, an “investment grade” asset can have the following ratings:

1. AAA The highest rating.
2. AA
3. A
4. BBB

Fitch uses the symbols + and - to make smaller adjustment to it's ratings. For example, AA+ is better than AA.

A credit rating is an assessment of the financial capacity of an entity (corporation or government institution) to pay it's financial obligations. Common stocks do not constitute debt: they are not subject of credit ratings. Credit ratings apply to debt securities like bonds.

Credit ratings can be applied also to:

• Corporations
• National governments
• Financial institutions
• Insurance companies
• Municipalities

It is considered that an institution with a better rating (AAA) has a lower default risk than an institution with a worse rating (BBB).

Fitch Rating Scale:

Investment Grade:

• AAA: the best grade. This grade is given to stable and reliable companies. As of 2018, in US only Microsoft and Johnson & Johnson are rated AAA
• AA: these are quality companies that have very strong capacity to meet it's financial obligations but a little more riskier that AA companies.
• A: Strong capacity to meet it's obligations. This capacity may be more vulnerable to changes in economic conditions.
• BBB: these are medium class companies. There is a low expectation of interrupted payments, but changes in circumstances are more likely to impact it's capacity.

Non-investment grade The probability that the company will repay it's debt is deemed to be speculative.

• BB: company's payment capacity is prone to changes in the economy.
• B: the financial situation of the company varies noticeably.
• CCC: the current situation of the company is vulnerable. The company depends on favorable conditions to meet it's commitments.
• CC: very vulnerable
• C: the company or issuer can be in bankrupcy, but it's still paying it's obligations.
• D: the company has defaulted, and Fitch believes it will default most of the future obligations.
• NR; Not Rated

Fitch ratings for selected countries:

• Light blue represent countries with good ratings
• Violet represents countries with ratings near to BBB
• Red represents countries with bad credit ratings (CCC)

Credit rating agencies Official Website