Rating Grades and Rating Status

Rating grades rank an agency’s relative credit-risk opinion, while rating status describes whether that opinion is current, changing, withdrawn, or unavailable. These labels can affect a bond’s spread, index membership, collateral treatment, and portfolio eligibility, but they do not guarantee repayment or measure every source of risk.

Start With the Rating Context

Before interpreting a symbol, identify five things: the rating agency, scale, issuer or obligation, effective date, and status. A BBB- issue rating and a BBB- issuer rating are not interchangeable, and a rating under review carries different context from a stable current opinion.

Use Bond Rating for the major long-term scales, symbol modifiers, issuer-versus-issue distinctions, and split-rating rules.

Grade Boundaries

Investment-Grade Bond explains the commonly used BBB- / Baa3 lower boundary and why investment grade is not the same as safety. High-Yield Bond covers debt below that boundary, including spread, default, recovery, liquidity, covenant, and call risk.

The boundary is methodology-dependent when agencies disagree. A fund or index may use the lowest rating, the middle rating, a composite, or another published rule. Always check the rule before deciding which side of the boundary a split-rated bond occupies.

Changes and Portfolio Status

The Rating Actions and Unrated Status branch covers what happens after a rating changes or when no agency rating is displayed. Start there for a fallen angel or a portfolio’s weighted average credit rating.

Analytical Checklist

• Confirm the exact rated entity or obligation and current rating date.
• Compare every available agency opinion and note split ratings.
• Check outlook, watch, upgrade, downgrade, withdrawal, and NR status separately.
• Read the portfolio or index methodology before applying a grade threshold.
• Pair the rating with spread, liquidity, duration, seniority, covenants, and recovery analysis.
• Treat the symbol as one evidence source, not a recommendation or price target.

This section is educational only and does not provide a credit opinion or investment recommendation.

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