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Credit ratings do not deal with the risk of market value loss due to changes in interest rates, liquidity and/or other market considerations. The European Securities and Markets Authority also maintains a central repository of historical default rates.įitch’s credit ratings do not directly address any risk other than credit risk. For information about the historical performance of ratings, please refer to Fitch’s Ratings Transition and Default studies, which detail the historical default rates. Such issues are also denoted as ‘NR’ on its web page.Ĭredit ratings express risk in relative rank order, which is to say they are ordinal measures of credit risk and are not predictive of a specific frequency of default or loss. Investment grade categories indicate relatively low to moderate credit risk, while ratings in the speculative categories signal either a higher level of credit risk or that a default has already occurred.įitch may also disclose issues relating to a rated issuer that are not and have not been rated. The terms “investment grade” and “speculative grade” are market conventions and do not imply any recommendation or endorsement of a specific security for investment purposes. In each case, users should refer to the definitions of each individual scale for guidance on the dimensions of risk covered in each assessment.įitch’s credit rating scale for issuers and issues is expressed using the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative grade) with an additional +/- for AA through CCC levels indicating relative differences of probability of default or recovery for issues. For example, Fitch provides specialized ratings of servicers of residential and commercial mortgages, asset managers and funds. Please see the section Specific Limitations Relating to Credit Rating Scales for details.įitch Ratings also publishes other ratings, scores and opinions. In limited cases, Fitch may include additional considerations (i.e., rate to a higher or lower standard than that implied in the obligation’s documentation). Issue ratings are assigned to secured and unsecured debt securities, loans, preferred stock and other instruments, Structured finance ratings are issue ratings to securities backed by receivables or other financial assets that consider the obligations’ relative vulnerability to default.Ĭredit ratings are indications of the likelihood of repayment in accordance with the terms of the issuance. Issue level ratings are also assigned, often include an expectation of recovery and may be notched above or below the issuer level rating. Issuer default ratings (IDRs) are assigned to corporations, sovereign entities, financial institutions such as banks, leasing companies and insurers, and public finance entities (local and regional governments). Fitch Ratings publishes credit ratings that are forward-looking opinions on the relative ability of an entity or obligation to meet financial commitments.