Fitch

Fitch Ratings

Fitch ratings is part of the Fitch group, alongside Fitch Solutions and Algorithmics Inc. It is one of the the three larger credit rating agencies (the other two being: Moody’s and Standard & Poor’s) which provide credit ratings for debt instruments (such as bonds) which are used by companies who are in need of credit. They provide both short term and long term credit ratings. It is thought to have about a 10% market share.

Fitch Ratings Scale

Long Term Fitch Credit Ratings

Fitch’s long term credit ratings range from AAA to D, they were first introduced in 1924 and then later adopted by other credit rating agencies. The intermediate modifiers (plus and minus signs) are used to differentiate between those in the top of a letter rating and the bottom. E.g AA+ is better than AA which is better than AA-. These ratings are used to measure a companies ability to meet it’s debt obligation over a period of more than twelve months (anything under twelve months and a short term rating is used).

Long Term Fitch Ratings Scale

Grade	Letter Rating	What This Means
Investment Grade	AAA	Corporations or companies with a triple A rating are of the highest quality, they have a strong capacity to meet all of their debt obligations.
Investment Grade	AA	Has a strong capacity to meet it’s debt obligations, the difference between AAA and AA is small.
Investment Grade	A	These companies have a strong capacity to meet their debt obligations, although if the economic conditions worsen they may struggle.
Investment Grade	BBB	Has an adequate capacity to meet it’s debt obligations, worsening economic conditions could hampen this ability.
Non-Investment Grade	BB	Prone to big movements in the economy, otherwise generally OK.
Non-Investment Grade	B	Financial situation is prone to big movements
Non-Investment Grade	CCC	Currently vulnerably, needs positive economic and business conditions to meet it’s debt obligations.
Non-Investment Grade	CC	Highly vulnerable, extremely speculative
Non-Investment Grade	C	Highly vulnerable, possibly in bankruptcy or voluntary administration but still continuing to meet it’s debt obligations.
Non-Investment Grade	D	Has defaulted on it’s debt obligations and Fitch believes it will default on most if not all  outstanding and new obligations
Non-Investment Grade	N/R	Not Rated Publicly

Short Term Fitch Credit Ratings

Short term ratings are used to measure the potential threat of default within a twelve month period.

Short Term Fitch Ratings Scale

Grade	Letter Rating	What This Means
Investment Grade	F1+	Best grade, this company has an extremely strong ability to meet its debt obligations
Investment Grade	F1	Best grade, this company has a very strong ability to meet its debt obligations
Investment Grade	F2	Good quality grade with satisfactory capacity of obligor to meet its debt obligations
Investment Grade	F3	Has an adequate capacity to meet it’s debt obligations, worsening economic conditions could hampen this ability.
Non-Investment Grade	B	Speculative grade, minimum capacity to meet its debt obligations. Very vulnerable to short term changes in the economic environment
Non-Investment Grade	C	High possibility of default, it’s ability to meet it’s debt obligations is reliant of sustained positive business and economic conditions
Non-Investment Grade	D	Already in default, this company has failed to meet its debt obligations.