Definition of Credit Rating
Ratings of Commercial Paper There are 6 ratings from A1 to D in credit ratings of commercial paper.
| Ratings | Definition |
|---|---|
| A1 | Ability to repay the debt in time is the highest allowing the investment risk to be extremely low. It is stable enough not to be affected by any of environmental changes that can be reasonably predicted in the future. |
| A2 | Ability to repay the debt in time is excellent allowing the investment risk to be very low, however, inferior factors exist compared to A1. |
| A3 | Ability to repay the debt in time is good allowing the investment risk to be low, however, there is a possibility that it could be affected by a sudden environmental change in the future. |
| B | Ability to repay the debt in time is recognized, however, speculative factors are implied. |
| C | Ability to repay the debt in time is questionable. |
| D | State of default of payment |
※ + or - are added from AA to CC according to relative order of the ratings.
Ratings of Corporate Bond There are 10 ratings from AAA to D in the credit ratings of bond assessments.
| Grade | Definition |
|---|---|
| AAA | Certainty of principal and interest payment is the highest allowing investment risk to be extremely low. It is stable enough not to be affected by any of environment changes that can be reasonably predicted in the future. |
| AA | Certainty of principal and interest payment is very high allowing investment risk to be very low, however, inferior factors exist compared to AAA. |
| A | Certainty of principal and interest payment is high allowing investment risk to be low, however, there is a possibility that it will be affected by sudden environmental changes in the future. |
| BBB | Certainty of principal and interest payment is recognized; however, this certainty may decline under environmental changes in the future. |
| BB | There is no direct problem in the certainty of principal and interest payment, however, speculative factors are implied in terms of stability in the future. |
| B | Due to lack of certainty of principal and interest payment, it is speculative. Stability in the future is not guaranteed at this stage. |
| CCC | It carries a possibility of default and is very speculative. |
| CC | There is a high possibility of default that leads to much more unstable factors compared to higher grades. |
| C | High possibility of unfulfillment of obligatory debt repayment and no ability of principle amount payment |
| D | Under situation of unfulfillment of obligatory debt repayment and bankruptcy |
※ + or - are added from A2 to B according to relative order of the ratings.
