How the World Works

Credit rating

A grade from an agency such as S&P, Moody’s or Fitch on how likely a borrower is to repay. A downgrade can force some investors, whose rules limit how much lower-rated debt they hold, to sell.

Example

Ratings run from AAA, the safest, down through AA, A and BBB. Below BBB is called “high yield” or “junk”.

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