This document defines various credit ratings scales and terms used by Fitch Ratings. It outlines long-term and short-term international and national rating scales ranging from AAA to D. It also describes other ratings including recovery ratings, fund ratings, servicer ratings, and asset management ratings. Additional terms covered include rating watches, outlooks, and actions. The document provides definitions and notes on limitations and appropriate usage of the various ratings.

1. Definitions of Ratings and Other
Forms of Opinion

2. UNDERSTANDING CREDIT RATINGS – LIMITATIONS AND USAGE ..............................................................................................4
A. CREDIT RATING SCALES...............................................................................................................................................6
SUMMARY OF PRIMARY SCALES........................................................................................................................................7
A.1 INTERNATIONAL ISSUER AND CREDIT RATING SCALES...............................................................................................9
A.2 RECOVERY RATINGS..............................................................................................................................................21
A.3. OTHER INTERNATIONAL CREDIT RATINGS ...............................................................................................................23
A.4 NATIONAL RATINGS ...............................................................................................................................................32
A.5 COUNTRY CEILINGS ...............................................................................................................................................38
A.6 ADDITIONAL USAGE OF PRIMARY CREDIT RATING SCALES ......................................................................................39
B. OTHER SPECIALIST RATING SCALES ..........................................................................................................................41
B.1 SERVICER RATINGS ...............................................................................................................................................41
B.2 FUND RATINGS ......................................................................................................................................................44
B.3 ASSET MANAGEMENT RATINGS ..............................................................................................................................53
C. OTHER FORMS OF OPINION.........................................................................................................................................55

3. D. RATING WATCHES AND RATING OUTLOOKS ................................................................................................................56
E. RATING ACTIONS .......................................................................................................................................................58

6. Introduction
ability
obligation

7. 1
Recalibration of U.S. Public Finance Ratings

9. AAA: Highest credit quality.
AA: Very high credit quality.
A: High credit quality.
BBB: Good credit quality.
BB: Speculative.
B: Highly speculative.

10. CCC: Substantial credit risk.
CC: Very high levels of credit risk.
C: Exceptionally high levels of credit risk
RD: Restricted default.
D: Default.
Note:
The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such
suffixes are not added to the ‘AAA’ Long-Term IDR category, or to Long-Term IDR categories below ‘B’.

11. Understanding Credit Ratings - Limitations and
Usage

12. AAA: Highest credit quality.
AA: Very high credit quality.
A: High credit quality.
BBB: Good credit quality.
BB: Speculative.
B: Highly speculative.
CCC: Substantial credit risk.
CC: Very high levels of credit risk.
C: Exceptionally high levels of credit risk.

13. Note:
The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are
not added to the ‘AAA’ obligation rating category, or to corporate finance obligation ratings in the categories below ‘CCC’.
The subscript ‘emr’ is appended to a rating to denote embedded market risk which is beyond the scope of the rating. The
designation is intended to make clear that the rating solely addresses the counterparty risk of the issuing bank. It is not meant to
indicate any limitation in the analysis of the counterparty risk, which in all other respects follows published Fitch criteria for
analyzing the issuing financial institution. Fitch does not rate these instruments where the principal is to any degree subject to
market risk.
† Table of the Relationship between Performing and Non-performing Corporate Obligations in Low Speculative
Grade (Recovery Ratings are discussed in section A.2)
Obligation
Rating Performing Obligation Non-performing Obligation

14. Understanding
Credit Ratings - Limitations and Usage

15. AAA: Highest credit quality.
AA: Very high credit quality.
A: High credit quality.
BBB: Good credit quality.
BB: Speculative.
B: Highly speculative.
CCC: Substantial credit risk.
CC: Very high levels of credit risk.
C: Exceptionally high levels of credit risk.
D: Default.

16. Structured Finance Defaults
Structured Finance Write-downs
Notes:
In the case of structured and project finance, while the ratings do not address the loss severity given default of the
rated liability, loss severity assumptions on the underlying assets are nonetheless typically included as part of the
analysis. Loss severity assumptions are used to derive pool cash flows available to service the rated liability.
The suffix ‘sf’’ denotes an issue that is a structured finance transaction. For an explanation of how Fitch determines
structured finance ratings, please see our criteria available at www.Fitchratings.com.
In the case of public finance, the ratings do not address the loss given default of the rated liability, focusing instead on
the vulnerability to default of the rated liability.
The modifiers “+” or “-” may be appended to a rating to denote relative status within major rating categories. Such
suffixes are not added to the ‘AAA’ Long-Term Rating category, or categories below ‘B’.
Enhanced Equipment Trust Certificates (EETCs) are corporate-structured hybrid debt securities that airlines typically
use to finance aircraft equipment. Due to the hybrid characteristics of these bonds, Fitch’s rating approach incorporates
elements of both the structured finance and corporate rating methodologies. Although rated as asset-backed securities,
unlike other structured finance ratings, EETC ratings involve a measure of recovery given default akin to ratings of
financial obligations in corporate finance, as described in paragraph A.1.1.2.

17. Understanding
Credit Ratings - Limitations and Usage

18. F1: Highest short-term credit quality.
F2: Good short-term credit quality.
F3: Fair short-term credit quality.
B: Speculative short-term credit quality.
C: High short-term default risk.
RD: Restricted default.
D: Default.
Understanding Credit Ratings - Limitations and
Usage

19. Short-Term Ratings Criteria for Corporate Finance Rating Municipal Short-term
Debt

20. Long-Term Rating Short-Term Rating

21. RR1: Outstanding recovery prospects given default
RR2: Superior recovery prospects given default
RR3: Good recovery prospects given default
RR4: Average recovery prospects given default
RR5: Below average recovery prospects given default
RR6: Poor recovery prospects given default

22. Understanding Credit Ratings - Limitations and
Usage

23. The Purpose and Function of Support Ratings
Timeliness and Effectiveness Requirements
Obligations and Financial Instruments Covered
Definitions:
1:
2:
3:

24. 4:
5:
Support Rating Floor

25. aaa
aa
a
bbb
bb

26. b
ccc
cc
c
f
s within major rating
categories. Such suffixes are not added to the ‘aaa’ VR category or to VR categories below ‘b’. Outlooks are
not assigned to VRs although at any point in time, a bank’s position and prospects may have underlying
trends, for example improving, deteriorating or stable.
A:
B:
C:

27. D:
E:
F:
Note:
Gradations may have been used among the ratings A to E: i.e. A/B, B/C, C/D, and D/E. No gradations applied to the F
rating.

29. AAA: Exceptionally strong.
AA: Very strong.
A: Strong.
BBB: Good.
BB: Moderately weak.
B: Weak.
CCC: Very weak.
CC: Extremely weak.

30. C: Distressed
Notes:
“+” or “-” may be appended to a rating to indicate the relative position of a credit within the rating category. Such
suffixes are not added to ratings in the ‘AAA’ category or to ratings below the ‘B’ category.

31. F1
F2
F3
B
C

32. Understanding Credit Ratings - Limitations and Usage

33. AAA(xxx)
AA(xxx)
A(xxx)
BBB(xxx)
BB(xxx)
B(xxx)
CCC(xxx)
CC(xxx)
C(xxx)
RD(xxx): Restricted default.

34. D(xxx)

35. F1(xxx)
F2(xxx)
F3(xxx)
B(xxx)
C(xxx)
RD(xxx): Restricted default.
D (xxx)
Notes to Long-Term and Short-Term National Ratings:
The ISO International Country Code is placed in parentheses immediately following the rating letters to indicate the
identity of the National market within which the rating applies. For illustrative purposes, (xxx) has been used.
“+” or “-” may be appended to a National Rating to denote relative status within a major rating category. Such suffixes
are not added to the ‘AAA(xxx)’ Long-Term National Rating category, to categories below ‘CCC(xxx)’, or to Short-Term
National Ratings other than ‘F1(xxx)’.

36. AAA(xxx)
AA(xxx)
A(xxx)
BBB(xxx)
BB(xxx)
B(xxx)
CCC(xxx)

37. CC(xxx)
‘C’(xxx)
Notes:
“+” or “-” are used with a rating symbol to indicate the relative position of a credit within the rating category. They are
not used for the ‘AAA’ category or for ratings below the ‘CCC’ category.
The ISO International Code is placed in parentheses immediately following the rating letters to indicate the identity of
the National market within which the rating applies. For illustrative purposes, (xxx) has been used.

41. Rating Definitions
Level 1 Servicer Rating (ABPS1, ABMS1, ABSS1, CPS1, CMS1, CSS1, CCLS1, CLLSS1, RPS1, RMS1, RSS1,
SBPS1, SBSS1)
Level 2 Servicer Rating (ABPS2, ABMS2, ABSS2, CPS2, CMS2, CSS2, CCLS2, CLLSS2, RPS2, RMS2, RSS2,
SBPS2, SBSS2)
Level 3 Servicer Rating (ABPS3, ABMS3, ABSS3, CPS3, CMS3, CSS3, CCLS3, CLLSS3, RPS3, RMS3, RSS3,
SBPS3, SBSS3)

42. Level 4 Servicer Rating (ABPS4, ABMS4, ABSS4, CPS4, CMS4, CSS4, CCLS4, CLLSS4, RPS4, RMS4, RSS4,
SBPS4, SBSS4)
Level 5 Servicer Rating (ABPS5, ABMS5, ABSS5, CPS5, CMS5, CSS5, CCLS5, CLLSS5, RMS5, RPS5, RSS5,
SBPS5, SBSS5)

44. Understanding Credit Ratings - Limitations
and Usage

46. Understanding Credit Ratings - Limitations
and Usage

47. AAAmmf:
AAmmf:
Ammf:
BBBmmf
BBmmf
Bmmf
Understanding Credit Ratings - Limitations
and Usage

48. ‘Excellent’
‘
Strong’
‘Satisfactory’
‘Weak’
‘Inadequate’
‘Qualifying’

52. Understanding Credit Ratings - Limitations
and Usage

53. Asset Manager Rating Scale (International)
AM Rating Scale AM Rating Definitions
Source: Fitch
Understanding Credit Ratings – Limitations and
Usage

54. Asset Manager Rating Scale (National)
AM Rating Scale AM Rating Definitions

58. Standard Rating Actions, Rating Modifiers, Data Actions, Historical Actions
Affirmed*
Confirmed
Downgrade*
Matured*/Paid-In-Full
New Rating*
Prerefunded *
Publish*
.
Upgrade*
Withdrawn*
Rating Modifier Actions

59. Rating Watch Maintained*
Rating Watch On*
Rating Watch Revision*
Support Floor Rating Revision
Under Review*
The Following Actions Will Only Apply in Structured Finance Transactions.
Revision Outlook
*A rating action must be recorded for each rating in a required cycle to be considered compliant with Fitch policy
concerning aging of ratings. Not all Ratings or Data Actions, or changes in rating modifiers, will meet this requirement.
Actions that meet this requirement are noted with an * in the above definitions.
E.1.2. Data Actions
Revision Enhancement
Revision IDR
Revision Rating
E.1.3 Historical Actions

60. Change
Database Add
Distressed Recovery Rating Revision
Bank Individual Ratings
Loss Severity Rating Revision
Recovery Rating Revision
Revision MMF
Revision Outlook
Withdrawn – Prerefunded