Bond rating agencies typically use similar scales, and it may be helpful to understand how to compare ratings from multiple agencies.
This chart compares bond ratings in descending order of creditworthiness (from left to right) as judged by the three best-known credit agencies.
| Investment Grade | Non-Investment Grade | |||||||
| S&P | AAA | AA | A | BBB | BB | B | CCC | CC/C/D |
| Moody’s | Aaa | Aa | A | Baa | Ba | B | Caa | Ca/C |
| Fitch Ratings | AAA | AA | A | BBB | BB | B | CCC | RD/D |
Standard & Poor’s and Fitch Ratings use the symbols + and – to denote the upper and lower ranges of ratings from AA to CCC; Moody’s uses the numbers 1, 2, 3 to denote the upper, middle, and lower ranges from Aa to Caa.
Note: If a bond is insured (typically for lower-rated bonds), there will be two ratings, one for the bond issuer and one for the insurer. Bond insurance adds a potential layer of protection in the event that an issuer defaults, but it is only as good as the insurer’s credit quality and ability to pay. An investor should not buy bonds based solely on the insurance.
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