IN THE KNOW: top 3 major credit rating agencies | Inquirer Business

IN THE KNOW: top 3 major credit rating agencies

/ 04:51 AM March 28, 2013

AFP FILE PHOTO

MANILA, Philippines—The top three major credit rating agencies—Moody’s Investors Service, Standard & Poor’s and Fitch Ratings—assess the ability of a country to manage its debts.

The ratings assigned by these international credit watchdogs are adjusted depending on their perceived credit worthiness of a country. The ratings also take into account overall economic environment and political conditions.

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Investors often consider credit ratings when evaluating the general investment climate of a country. An investment grade rating is expected to allow a country to attract more job-generating foreign direct investments.

Moody’s, S&P and Fitch are the nationally recognized statistical ratings organizations by the United States Securities and Exchange Commission.

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Each rating agency has its own methodology in measuring credit worthiness and uses a specific rating scale for its credit rating opinion.

Fitch’s ratings are based on established criteria and methodologies that are continuously examined and updated. The firm’s opinions are forward-looking and include views of analysts on future performance.

Fitch, dual-headquartered in New York and London, was founded by John Knowles Fitch as Fitch Publishing Co. in 1913. It started as a publisher of financial statistics.

In 1924, it first introduced the “AAA” (highest credit quality) to “D” (default) ratings scale as the demand for independent analysis of financial securities grew. Inquirer Research

Sources: Inquirer Archives, Investopedia, websites of Fitch, Moody’s and S&P

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TAGS: credit rating agencies, credit-worthiness, debts, fitch ratings, Moody’s Investors Service, Rating agencies, Standard & Poor's
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