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moodies def - Rating Symbols and Definitions November 2009...

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Rating Symbols and Definitions NOVEMBER 2009
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Preface In the spirit of promoting transparency and clarity, Moody’s Standing Committee on Rating Systems & Practices offers this updated reference guide which defines Moody’s various symbols and rating scales. Since John Moody devised the first bond ratings almost a century ago, Moody’s rating systems have evolved in response to the increasing depth and breadth of the global capital markets. Much of the innovation in Moody’s rating system is a response to market needs for clarity around the components of credit risk or to demands for finer distinctions in rating classifications. From the original 1909 bond rating definitions, Moody’s ratings have expanded to the extent that today we maintain 32 systems, with the number growing every year. 1
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RATING SYMBOLS AND DEFINITIONS MOODY’S INVESTORS SERVICE 1 Rating Systems Outstanding by Decade 1. By counting National Scale Ratings for each country as a separate system, the total exceeds 40. In its simplest terms, Moody’s assigns and publishes two kinds of ratings: 1) CREDIT RATINGS AND OTHER CREDIT SIGNALS Moody’s credit ratings are opinions of the credit quality of individual obligations or of an issuer’s general creditworthiness (without respect to individual debt obligations or other specific securities). Examples include our long-term obligation ratings, syndicated loan ratings, bank deposit ratings, national scale ratings and insurance financial strength ratings. Moody’s also provides auxiliary signals about credit risk through the use of Rating Outlooks and Watchlist designations (review for rating change). 2) NON-CREDIT RATINGS » Moody’s has implemented special rating systems to address other aspects of risk, including market risk ratings, investment manager quality ratings, servicer quality ratings, and Lloyd’s syndicate volatility ratings. Unless otherwise indicated within the definition, all rating systems are monitored, that is, surveillance is ongoing. Ratings may also be withdrawn for various reasons. Please refer to Moody’s Guidelines for the Withdrawal of Ratings, available on moodys.com, for a list of such circumstances. The Standing Committee on Rating Systems & Practices, one of several at Moody’s that focuses on credit policy issues, is comprised of structured finance, corporate finance, public finance, financial institutions and sovereign credit analysts. The names, direct telephone numbers and e-mail addresses of the members of the Standing Committee are listed below. I invite you to contact us with your comments. Benedicte Pfister Chair, Standing Committee on Rating Systems & Practices 35 30 25 20 15 10 5 0 1900s 1970s 1980s 1990s 2000s
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2 MOODY’S INVESTORS SERVICE RATING SYMBOLS AND DEFINITIONS Benedicte Pfister - Chair +4420-7772-8629 Team Managing Director, Structured Finance Group [email protected] Jack Dorer +1-212-553-1332 Team Managing Director, US Public Finance Group [email protected] David Fanger +1-212-553-4342 Senior Vice President, Financial Institutions Group [email protected]
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