Page 105 - ES 2020-21_Volume-1-2 [28-01-21]
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88 Economic Survey 2020-21 Volume 1
Sovereign credit ratings broadly rate countries as either investment grade or speculative grade, with
the latter projected to have a higher likelihood of default on borrowings. The threshold of Investment
grade is considered to be BBB- for S&P and Fitch and Baa3 for Moody’s. Table below presents the
rating scale comparison between S&P, Moody’s and Fitch.
Credit Rating Scale Comparison between some major CRAs
Interpretation Fitch and S&P Moody's
Highest quality AAA Aaa
High quality AA+ Aa1
AA Aa2
AA– Aa3
Strong payment capacity A+ A1
A A2
A– A3
Adequate payment capacity BBB+ Baa1
BBB Baa2
BBB– Baa3
Likely to fulfill obligations, on BB+ Ba1
going uncertainty BB Ba2
BB– Ba3
High-risk obligations B+ B1
B B2
B– B3
Vulnerable to default CCC+ Caa1
CCC Caa2
CCC– Caa3
Near or in bankruptcy or default CC Ca
C C
D D
Source: IMF (2010)
Examples of credit ratings methodologies employed by some CRAs may be seen in the Appendix,
which presents the credit ratings methodology of Moodys’ and Fitch.
