What do S&P's alphabetic ratings mean?

Published: Tuesday, August 9, 2011, 12:57 [IST]

Standard & Poor's, Moody's and Fitch Ratings assign alphabets to denominate strength and weakness of the country's financial position.

Check out, what do S&P's alphabetic ratings mean?

AAA - Extremely strong capacity to meet financial commitments. Highest rating
AA - Very strong capacity to meet financial commitments
A - Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances
BBB - Adequate capacity to meet financial commitments, but more subject to adverse economic conditions
BBB- (minus) - this is the lowest rating before non-investment grade
BB: Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions
B: More vulnerable to adverse business, financial to meet financial commitments
CCC: Currently vulnerable and dependent on meet financial commitments
CC: Currently highly vulnerable
C: A bankruptcy petition has been filed or similar continued
D: Payment default on financial commitments

Ratings in the 'AAA,' 'AA,' 'A' and 'BBB' categories are regarded by the market as investment grade.

Ratings in the 'BB,' 'B,' 'CCC,' 'CC' and 'C' categories are regarded as having significant speculative characteristics.

Ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

NR indicates that no rating had been requested, there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a matter of policy.