Credit rating

How it is used

Agencies assign, upgrade, downgrade or affirm a credit rating and give an outlook (positive, stable or negative). Ratings of BBB- or Baa3 and above are investment grade; lower ratings are called high yield or, informally, junk. A downgrade usually raises borrowing costs.

Example sentences

1. The agency upgraded the country's credit rating by one notch and kept a positive outlook.

2. Only bonds with an investment-grade credit rating can be held by this fund.

Common collocations

• upgrade a credit rating
• downgrade a credit rating
• sovereign credit rating
• investment-grade credit rating
• rating outlook

Related terms

• corporate bondA bond issued by a company to raise money. It usually pays a higher yield than a government bond because the risk that the company cannot pay is higher.
• government bondA bond issued by a national government to borrow money, paying interest and returning the principal at maturity. It is often seen as one of the safest investments in its own currency.
• defaultA failure by a borrower, such as a company or government, to make interest or principal payments on its debt on time, or to keep other terms of the loan.
• bondA loan that an investor gives to a government or company. The issuer usually pays regular interest and returns the original amount on a fixed date.
• yieldThe income an investment produces, shown as a yearly percentage of its price. For bonds, it is the return an investor gets if the bond is bought at today's price.

This word in other fields

The same English word can have a different meaning in another field:

• credit rating · Finance & Banking

More terms: Bonds & Fixed Income

• coupon
• maturity
• fixed income