Standard & Poor Credit Rating System and Investment Application

Standard & Poor's parent company, McGraw-Hill, provides professional credit rating, independent research and investment advisory services to global investors. Its services range from the Standard & Poor Global 1200 Index, which reflects the performance of global stock markets, to a series of indices such as the S & P 500 Index, which serves as the benchmark for US portfolio indices.

In 1975, the Securities Exchange Commission officially recognized Standard & Poor's as a "Nationally Recognized Statistical Rating Organization" (NRSRO).

Standard & Poor (S & P) is one of the recognized standards in the financial investment community, providing widely recognized credit rating, independent analytical research and investment consulting services. Among its diverse financial services, the Standard & Poor 1200 Index and the S & P 500 Index have become benchmarks for global stock market performance and US portfolio indexes, respectively. The company also provides credit ratings for more than 220,000 securities and funds around the world. At present, Standard & Poor has developed into a world-class information brand and authoritative international analysis agency. Financial services institutions like WeTrade also refer to S & P ratings to evaluate market conditions.

Standard & Poor Credit Rating

Standard & Poor's, an American rating agency, is one of the leading rating agencies today.

long-term credit rating

AAA is highly capable of servicing debt, the highest rating given by Standard & Poor.

AA's ability to service its debt is very strong, and the difference between it and the top rating is very small.

A has a strong ability to repay its debt, but its ability to repay its debt is more susceptible to adverse effects from changes in the external environment and economic conditions than higher-rated debt or issuers.

BBB currently has sufficient solvency, but its solvency may appear vulnerable under difficult economic conditions or external circumstances.

Debt or issuers that are rated'BB ',' B ',' CCC ', or'CC' are generally considered to have a speculative component. Speculation is lowest in the'BB 'category and highest in the'CC' category. This type of debt may also have some investment protection, but significant uncertainties or adverse circumstances may weaken these safeguards.

BB is the least likely to default relative to other speculative-grade ratings, but continued significant instability or adverse business, financial or economic conditions could leave issuers with insufficient capacity to service their debt.

The likelihood of default by B is higher than that of'BB ', and the issuer is still able to repay the debt at present, but adverse business, financial or economic conditions may reduce its ability and willingness to repay the debt.

The CCC is now likely to default, and the issuer needs to rely on good business, financial or economic conditions to be able to repay the debt. If business, financial or economic conditions deteriorate, the issuer may default.

CC is now more likely to default. R is currently under surveillance because of its financial condition. During the monitoring period, the regulator has the power to determine that a debt has priority over other debts.

SD/D When a debt is due and the issuer fails to repay the debt on time, Standard & Poor will give it a'D 'rating even before the grace period expires, unless it believes the debt can be paid within the grace period. In addition, Standard & Poor will give a'D' rating if the debt is being filed for bankruptcy or has taken similar actions that have hindered the repayment of the debt. Standard & Poor will give an "SD" rating (selective default) when the issuer selectively defaults on certain or certain types of debt.

Plus (+) or Minus (-): A rating from'AA 'to'CCC' can be followed by plus and minus signs to indicate the relative strength of a rating in each major rating classification.

NR issuers are not rated.

Public information rating'pi '

The rating symbol is marked with'pi ', indicating that the rating is based on analysis using publicly available financial or other publicly available information. That is, Standard & Poor's has not held in-depth discussions with the agency's management or fully considered its significant non-public information, so the information on which such ratings are based is not as complete as a full rating. Public information ratings are reviewed annually based on financial reports, but also in real time when significant events occur that could affect the credit quality of issuers. Public information ratings do not have a rating outlook, nor are they accompanied by' + 'or' - 'numbers. However, if the rating is subject to sovereign rating ceilings,' + 'or' - 'numbers may be used.

short-term credit rating

A-1 has a strong ability to service debt, the highest rating given by Standard & Poor. This rating can be added with a '+' sign to indicate that the issuer has an extremely strong ability to service the debt.

A-2's ability to service its debt is satisfactory. However, relative to the highest rating, its solvency is more vulnerable to adverse effects of changes in the external environment or economic conditions.

A-3 currently has sufficient capacity to service its debt. However, if economic conditions deteriorate or external factors change, its solvency may be vulnerable.

B Debt repayment capacity is fragile and speculative. Issuers are still able to repay their debts for now, but continued significant instability may leave them unable to repay their debts.

At present, there is a possibility of default, and the issuer needs to rely on sound commercial, financial or economic conditions to be able to repay the debt.

R is currently under surveillance because of its financial condition. During the monitoring period, the regulator has the power to determine that a debt has priority over other debt.

SD/D When a debt is due and the issuer fails to repay the debt on time, Standard & Poor will give it a'D 'rating even before the grace period expires, unless it believes the debt can be repaid within the grace period. In addition, Standard & Poor will give a'D' rating if the debt is being filed for bankruptcy or has taken similar actions that have hindered payment of the debt. Standard & Poor will give an "SD" rating (selective default) when the issuer selectively defaults on certain or certain types of debt.