Education / Bond market/ Investing in bonds

In investment practice the credit rating represents the credit value of a corporation. To potential investors of debt securities such as bonds the credit rating is an important financial indicator. It is assigned by credit rating agencies such as Standard & Poor's and have letter designations such as AAA, B, CC.

Five corporations have received from the Nationally Recognized Statistical Rating Organization (NRSRO) a designation: Standard & Poor's (S&P), Moody's, Fitch, A. M. Best and Dominion Bond Rating Service. S&P, Moody's, and Fitch are far larger than A.M. Best and Dominion, and dominate the market.

Moody's assigns bond credit ratings of Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, . Standard & Poor's and Fitch assign bond credit ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, D.

Moody's, S&P and Fitch will all also assign intermediate ratings at levels between AA and B (e.g., BBB+, BBB and BBB-), and may also choose to offer guidance (termed a "credit watch") as to whether it is likely to be upgraded (positive), downgraded (negative) or uncertain (neutral).