This Might Be the Definition of the Rating Symbol AAA

An obligation rated ‘AAA’ has the highest rating assigned by the rating agency. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.

AAA rated companies demonstrate an excellent credit quality. Such companies are characterized by an extremely positive future outlook and are viewed as being “first class” business partners. Although the various security elements can certainly change, such changes – to the extent this can be assessed – are highly unlikely to adversely affect the fundamentally strong position of such companies.

Why are there no legally binding definitions of rating symbols here? Depending on the subject of the rating and the scope of application, different legal framework conditions apply, which also differ in states of different legal systems. Rating scales are the subject of a development that has lasted for more than a century. Rating agencies continue to develop their scales due to new insights, improved analytical techniques and growing or changing market requirements. Therefore, in each individual case, the evidence of a rating is to be examined as to which statement should be made with a rating. Depending on the time, subject and other conditions, rating symbols are to be interpreted differently. Therefore, we recommend detailed advice. Why are rating agencies not mentioned here by name? It is the responsibility of each rating agency to provide its definitions of rating symbols and, if necessary, to update them. It happens that different rating agencies use the same rating symbols, sometimes with comparable but sometimes with different meanings. The definitions offered by rating agencies need to be questioned because in rare cases the wording of the definitions is ambiguous and promises, for example, a certainty of judgment that we at RATING EVIDENCE can not confirm empirically.