The Standard and Poor's Corporation (S&P), a subsidiary of McGraw-Hill, is a company that performs financial research and analysis on stocks and debt instruments. It is one of the top three players in this business. The other two are Moody's and A. M. Best . It is best known for its US-based S&P 500 and the Australian S&P 200 stock market index.
The company ranks the credit-worthiness of borrowers using a standardized ratings scale.
The basic ratings are:
- AAA - the best quality companies, reliable and stable
- AA - quality companies, a bit higher risk than AAA
- A - economic situation can affect finance
- BBB - medium class companies, which are satisfactory at the moment
- BB - more prone to changes in economy
- B - financial situation varies noticeably
- CCC - very speculative bonds, the company's profit is low
- CC - same as CCC
- C - same as CCC
- CI = past due on interest
- D = very bad economical condition, almost in bankrupt
Ratings below BBB are non-investment grade junk bonds.
- Standard and Poor's website http://www.standardandpoors.com
- History of Standard and Poor's http://www2.standardandpoors.com/NASApp/cs/ContentServer?pagename=sp/Page/AboutU
- Credit Raters Exert International Influence http://www.washingtonpost.com/ac2/wp-dyn/A5572-2004Nov22?language=printer
Last updated: 05-03-2005 17:50:55