Moody’s
Practical Law Canada Glossary 3-574-9459 (Approx. 2 pages)
Glossary
Moody’s
Moody's Investors Service is a credit rating agency that ranks the credit-worthiness of borrowers by rating their debt or other securities using a standardized ratings scale. They rate common and preferred shares, bonds and commercial paper.
Moody's long-term ratings. The scale for long-term fixed rate obligations with a maturity of one year or more runs from Aaa to C.
- Investment grade: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3 (from highest quality with minimal credit risk to medium grade with moderate credit risk).
- Non-investment grade (also referred to as junk): Ba1, Ba2, Ba3, B1, B2, B3, Caa1, Caa2, Caa3, Ca (speculative; from the least degree of speculation with substantial credit risk to the highest degree of speculation and at or near default); C (typically in default).
Moody's short-term ratings. The scale for short-term ratings for securities generally having an original maturity not exceeding thirteen months runs from P-1 to NP.
- Prime: P-1, P-2, P-3 (from superior ability to acceptable ability to repay short-term debt obligations).
- Not prime: NP (do not fall within any of the prime rating categories).
See Moody's website.
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