AAA

Aaa

Highest Quality

Highest grade a bond can be assigned; Triple-A bonds have a relatively small degree of risk because payment is secured by a stable revenue source according to rating agencies.

AA

Aa

High Quality

Similar to that of triple A, however the revenue sources for double-A rated bonds are slightly less secure than those of triple-A bonds according to rating agencies.

A

A

Upper Medium Quality

The issuer’s capacity to meet its financial commitment on the obligation is strong according to rating agencies, however revenue sources are relatively susceptible to fluctuations in relevant economic conditions.

BBB

Baa

Medium Grade

Medium-grade debt obligations that are adequately protected and secured according to rating agencies. May become unreliable if relevant economic conditions have long-run negative effects on revenue source.

BB

Ba

Somewhat Speculative

Lower-medium-grade obligations that are presently adequately protected and secured according to rating agencies, but represent long-term risk whether relevent economic conditions are favorable or not.

B

B

Low Grade Speculative

Bonds are presently adequately protected and secured according to rating agencies but represent risk regardless of economic conditions. Adverse business, financial, or economic conditions will likely impair the issuer’s capacity or willingness to meet its financial commitment on the obligation.

CCC

Caa

Low Grade, Default Possible

In additon to future risks typical of bonds in the previous category, these bonds are presently not adequately protected and secured according to rating agencies. Present relevant economic conditions pose a threat to revenue source.

CC

Ca

Low Grade, Partial Recovery Possible

High degree of present and future risk and greater chance of default by issuer according to rating agencies. Debt issued in same conditions which produced CCC rating of a prior issue; Given CC rating because of additional insecurity of being issued after CCC bonds.

C

C

Default, recovery unlikely

The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been taken, but payments on this obligation are being continued.

D

(none)

In default

Issues are in actual or imminent payment default.