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The following ratings scale applies
to foreign currency ratings
Investment Grade
AAA - Highest
credit quality
'AAA' ratings denote the lowest expectation of credit risk. They
are assigned only in case of exceptionally strong capacity for
timely payment of financial cornmitrnents. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA - Very
high credit quality
'AA' ratings denote a very low expectation of credit risk. They
indicate verv strong capacity for timely payment of financial
commitrnents. This capacity is not significantly vulnerable to
foreseeable events.
A - High
credit quality
'A' ratings denote a low expectation of credit risk. The capacity
for timely payrnent of financial commitrnents is considered stroncg.
This capacity may, nevertheless, be more vulnerable to changes
in circumstances or in economic conditions than is the case for
higher ratings.
BBB - Good
credit quality
'BBB' ratings indicate that there is currently a low expectation
of credit risk. The capacity for timely pay~nent of financial
commitments is considered adequate, but adverse changes in circumstances
and in economic conditions are more likely to impair this capacity.
This is the lowest investment-grade category.
Speculative Grade
BB - Speculative
'BB' ratings indicate that there is a possibility of credit risk
developing, particularly as the result of adverse economic change
over time; however, business or financial altematives may be
available to allow financial commitments to be met. Securities
rated in this category are not investment grade.
B - Highly
speculative
'B' ratings indicate that significant cTedit risk is present,
but a limited margin of safety remains. Financial cornmitments
are currently being met; however, capacity for continued pay~nent
is contingent upon a sustained, favourable business and economic
environ~nent.
CCC, CC,
C - High default risk
Default is a real possibility. Capacity for meeting financial
commitments is solely reliant upon sustained, favourable business
or economic developments. A 'CC' rating indicates that default
of some kind appears probable. 'C' ratings signal imminent default.
DDD, DD,
D - Default.
The ratings of obligations in this category are based on their
prospects for achieving partial or full recovery in a reorganization
or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision,
the following serve as general guidelines. 'DDD' obligations
have the highest potential for recovery, around 90% - 100% of
outstanding amounts and accrued interest. 'DD' indicates potential
recoveries in the range of 50% - 90% and 'D' the lowest recovery
potential, i.e., below 50%.
Entities rated in this category
have defaulted on some or all of their obligations. Entities
rated 'DDD' have the highest prospect for resumption of performance
or continued operation with or without a formal reorganization
process. Entities rated 'DD' and 'D' are generally undergoing
a formal reorganization or liquidation process; those rated 'DD'
are likely to satisfy a higher portion of their outstanding obligations,
while entities rated 'D' have a poor prospect of repaying all
obligations.
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