Credit Rating

Credit Rating Definition

Domestic corporate bond credit ratings are classified into 10 categories, ranging from AAA to D, based on a company's ability to meet its principal and interest obligations and its level of credit risk. Ratings from AAA to BBB are classified as investment grade, reflecting stable debt repayment capacity, while ratings from BB to C are classified as speculative grade, indicating relatively higher credit risk due to changes in economic and business conditions. Ratings from AA to B may be further differentiated within each rating category, where necessary, by adding " + " or " - " to indicate relative standing within the category.

AAA

Capacity for payment of financial commitments is exceptionally strong, and is so stable that it is unlikely to be affected by foreseeable future changes in circumstances

AA

Capacity for payment of financial commitments is very strong, and is unlikely to be affected by foreseeable future changes in circumstances

A

Capacity for payment of financial commitments is strong, but is more likely to be affected by future changes in circumstances than the higher ratings

BBB

Capacity for payment of financial commitments is adequate, but it may be weakened depending on future changes in circumstances

BB

Minimum capacity for payment of financial commitments is recognized, but there are speculative characteristics in terms of future stability

B

Capacity for payment of financial commitments is insufficient, and is highly speculative due to potential changes to stability

CCC

There is high likelihood of default

CC

There is very high likelihood of default

C

There is extremely high likelihood of default, and occurrence of default is inevitable within the reasonable range of prediction

D

In default at present