What is a bond rating?

A bond rating is a grading given to a bond that indicates its creditworthiness. Bond ratings are assigned by agencies, such as Moody's, Standard & Poor's, and Fitch Ratings, and reflect an analysis of the bond issuer's financial strength or capacity to pay a bond's principal and interest.

What is the difference between a bond rating agency and S&P?

The major rating agencies in the U.S. include Standard & Poor's (S&P), Moody's, and Fitch Ratings. While they follow similar principles, there are differences in their methodologies, rating scales, and expertise. Bond rating agencies are companies that assess the creditworthiness of both debt securities and their issuers.

What are the three major bond rating agencies?

The three primary bond rating agencies in the U.S. are Standard & Poor's Global Ratings, Moody's, and Fitch Ratings. Each uses a unique letter-based rating system to quickly convey to investors whether a bond carries a low or high default risk and whether the issuer is financially stable.