Standard & Poor’s (S&P)

What is Standard & Poor’s (S&P) Credit Ratings


Currently, there are three (3) major credit rating agencies in the world. They are Fitch Ratings, Moody’s & Standard & Poor’s.  Fitch Ratings & Standard & Poor’s are using the same scale from AAA to D which first introduced in 1924.

S&P credit ratings are the agency’s forward-looking opinions about credit risk. It measures about the ability and willingness of an issuer, such as government, to meet its financial obligations in full and on time.

The ratings are based on analysis on economic and financial condition and as well as financial history of borrowing and repayment

Credit ratings are important for countries as they seek international funding for development and any downgrade would mean higher borrowing costs. For the investors, credit ratings is used in making investment decisions.

The table below is the S&P credit rating scale and it’ s definitions.

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