Rating

A rating is an assessment of the creditworthiness of a company or a country by rating agencies. The best-known agencies are Standard & Poor's (S&P), Moody's and Fitch Ratings.

The rating is usually expressed by letters and is intended to provide the creditors or bond buyers with an assessment of how securely the interest payments can be made and the capital repaid. The rating is renewed at regular intervals and adjusted if necessary.

At S&P, for example, the best achievable rating is AAA, which is then downgraded to AA, A, BBB, BB, B, CCC, CC, C and finally D. Ratings from AAA to BBB are referred to as investment grade, a limit up to which many institutional investors are allowed to buy.

A company or country with a rating of BB or worse is already considered speculative. This area is called non-investment grade or high- yield.