Moody's Rating Scale

Long-Term Obligation Ratings

Moody's long-term obligation ratings are opinions of the relative credit risk of fixed-income obligations with an original maturity of one year or more. They address the possibility that a financial obligation will not be honored as promised. Such ratings reflect both the likelihood of default and any financial loss suffered in the event of default.

Investment grade

Aaa

Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk.

Aa1, Aa2, Aa3

Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

A1, A2, A3

Obligations rated A are considered upper-medium grade and are subject to low credit risk.

Baa1, Baa2, Baa3

Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.

Speculative grade

Ba1, Ba2, Ba3

Obligations rated Ba are judged to have speculative elements and are subject
to substantial credit risk.

B1, B2, B3

Obligations rated B are considered speculative and are subject to high credit risk.

Caa1, Caa2, Caa3

Obligations rated Caa are judged to be of poor standing and are subject to very
high credit risk.

Ca

Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

C

Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.