Each rating agency uses its own long-term rating scales which have about 10 or so grades. Long-term rating covers debts of over one year.
Moody's: This agency uses a rating made up of upper and lower case letters. From the most to the least favourable, the scale is as follows: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C. The rating is refined by a figure from 1 to 3, which indicates the company's position within a category.
Standard & Poor's and Fitch: These agencies use a rating scale in upper case letters. From the most to the least favourable: AAA, AA, A, BBB, BB, B, CCC, CC, C, D. The rating is refined by a + or -, according to whether the company is located in the higher or lower end of a given category.
Agencies include an outlook with each rating: this is the agency's opinion of the evolution in the quality of the company's credit. These outlooks are positive, stable or negative.
Short-term rating system
Short-term rating scales of the three agencies comprise between 5 and 7 grades. Short-term rating covers debts of less than one year.
Moody's: Ratings go from P-1 (Prime-1), the most favourable rating, to Not Prime, the least favourable.
Standard & Poor's: The scale is as follows: A-1+, A-1, A-2, A-3, B, C, and D.
Fitch: The rating scale is as follows: F1, F2, F3, B, C, and D.
Specific events can affect the quality of a company's credit. Agencies then have the possibility of “monitoring” ratings, with a “positive” or “negative” outlook. This can lead the agencies to confirm, raise or lower their rating.