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to topic listingTenant Credit Ratings
What are the Bond Rating Categories?
Each of the rating companies has a rating scale which reflects the degree of risk associated with a bond. High-end ratings reflect the lowest-risk issues; typically these bonds can be issued at lower interest rates.
• The Moody's scale ranges from "AAA" on the high end to "C" on the low end with seven intermediate categories.
• Standard and Poor's index ranges from "AAA" to "D" with eight intermediate categories.
What are the Bond Rating Criteria?
The rating companies use very similar criteria in determining municipal bond ratings. Each identifies essentially the same four principal credit factors which figure into the rating of long- term bonds:
economic factors;
• debt factors;
• governmental/administrative factors; and
• fiscal/financial performance factors.
What is investment grade?
Much of the debt issued by governmental entities is rated by private, independent bond rating companies. The bond ratings assigned by these companies reflect the degree of risk associated with the bonds. There are three major companies which rate municipal debt issues in the United States:
• Moody's Investors Service; (Moody's)
• Standard and Poor's Corporation; and - (S&P)
• Fitch's Investors Service. (Fitch)
