What Are the Fitch Ratings?

Bonds issued by the U.S. Treasury are rated highly due to low expectations of default risk.

Fitch ratings provide investors with a gauge to measure the level of risk of a particular credit instrument like a bond or a loan. Although Fitch generates ratings opinions on risk, investors must also weigh the risks associated with changes in economic and financial conditions.

Highest Quality

The highest-quality credit rating assigned by Fitch is an AAA, which indicates that there is little expectation of default risk. In addition, the issuer of the debt is likely to make all interest payments.Strong credit ratings include AA, A and BBB.

Speculative

Speculative ratings include BB and B to indicate a higher risk of default, especially over the long term. As economic conditions change, the corporation or government issuing the bonds may run into difficulty in making regular interest payments.

Risky

Fitch assigns a rating of CCC, CC and C to the riskiest credit securities. For these ratings, defaulting on payment commitments is a likely possibility. Issuers who completely or temporarily suspend regular interest payments by agreement but have not declared bankruptcy are assigned a rating of Restricted Default (RD).

References

• Fitch Ratings: Understanding Credit Ratings--Limitations and Usage

Resources

• Fitch Ratings: The History of Fitch Ratings