An independent financial rating agency based in the United States.
Fitch Ratings Inc. is one of the “Big Three” credit rating agencies, and is one of three nationally recognized rating organizations designated by the Securities and Exchange Commission.
Their ratings are comprised of both letters and numbers, and include several different rating classifications:
- Issuer Default Ratings
- National Long-Term Credit Ratings
- National Short-Term Credit Ratings
- Recovery Ratings
- Financial Institutions Viability Ratings
Issuer default ratings are the most commonly-cited, and include the following ratings:
- AAA – Highest credit quality, lowest risk of default. Only awarded to exceptionally strong companies
- AA – Very high credit quality, very low default risk
- A – High credit quality, low default risk
- BBB – Good credit quality, currently a low risk of default. However, the business is more sensitive to adverse business or economic conditions
- BB – Speculative. Elevated vulnerability to default risk.
- B – Highly speculative. Material risk of default present, but a limited margin of safety is present. Financial commitments currently being met, but there is an increased risk of default if adverse business or economic conditions manifest.
- CCC – Substantial credit risk, with a low margin of safety. Default risk is a real possibility.
- CC – Very high level of default risk. Default is probable.
- C – Near default. Default or default-like process has already begun.
- RD – Restricted default. In Fitch’s opinion, the company with this rating has experienced an uncured payment default or distressed debt exchange on a bond, loan, or some other financial obligation. The company has not yet declared bankruptcy, receivership, liquidation, or otherwise stopped operating. It is technically still in business.
- D – Default. In Fitch’s opinion, the company with this rating has entered into default and has started bankruptcy proceedings, liquidation, or has otherwise stopped business operations with debt still outstanding.