- Fitch Ratings
Fitch Ratings, Ltd. is an international
credit rating agencydual-headquartered in New York Cityand London. It was one of the three Nationally Recognized Statistical Rating Organizations (NRSRO) designated by the U.S. Securities and Exchange Commissionin 1975, together with Moody'sand Standard & Poor's.
The firm was founded by
John Knowles Fitchon December 24, 1913in New York Cityas the Fitch Publishing Company. It merged with London-based IBCA Limited in December 1997, and is majority-owned by Fimalac(From Wikipedia.fr: [http://fr.wikipedia.org/wiki/Fimalac Fimalac] ), a French holding company. In 2000 Fitch acquired both Chicago, Illinois-based Duff & PhelpsCredit Rating Co. (April) and Thomson BankWatch(December). Fitch is the smallest of the "big three" NRSROs, covering a smaller share of the market than S&P and Moody's, though it has grown with acquisitions and frequently positions itself as a "tie-breaker" when those other two agencies have ratings similar, but not equal, in scale.
Stephen W. Joynt is Chief Executive Officer of Fitch Group, Inc., the parent company of Fitch Ratings, Algorithmics and Fitch Training. Joynt also serves as Chief Executive Officer of Algorithmics, Inc. and as President and Chief Executive Officer of Fitch Ratings.
Long-Term Credit Ratings
Fitch's long-term credit ratings are set up along a scale from 'AAA' to 'D', first introduced in 1924 and later adopted and licensed by S&P. Moody's also uses a similar scale, but names the categories differently. Like S&P, Fitch also uses intermediate modifiers for each category between AA and CCC (i.e., AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB- etc.).
*AAA : the best quality companies, reliable and stable
*AA : quality companies, a bit higher risk than AAA
*A : economic situation can affect finance
*BBB : medium class companies, which are satisfactory at the moment
Non-Investment Grade (also known as
*BB : more prone to changes in the economy
*B : financial situation varies noticeably
*CCC : currently vulnerable and dependent on favorable economic conditions to meet its commitments
*CC : highly vulnerable, very speculative bonds
*C : highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations
*D : has defaulted on obligations and Fitch believes that it will generally default on most or all obligations
*NR : not publicly rated
Short-Term Credit Ratings
Fitch's short-term ratings indicate the potential level of default within a 12-month period.
*F1+ : best quality grade, indicating exceptionally strong capacity of obligor to meet its financial commitment
*F1 : best quality grade, indicating strong capacity of obligor to meet its financial commitment
*F2 : good quality grade with satisfactory capacity of obligor to meet its financial commitment
*F3 : fair quality grade with adequate capacity of obligor to meet its financial commitment but near term adverse conditions could impact the obligor's commitments
*B : of speculative nature and obligor has minimal capacity to meet its commitment and vulnerability to short term adverse changes in financial and economic conditions
*C : possibility of default is high and the financial commitment of the obligor are dependent upon sustained, favourable business and economic conditions
*D : the obligor is in default as it has failed on its financial commitments.
Credit rating agenciessuch as Fitch have been subject to criticism in the wake of large losses in the collateralized debt obligation(CDO) market that occurred despite being assigned top ratings by the CRAs. For instance, losses on $340.7 million worth of collateralized debt obligations (CDO) issued by Credit Suisse Groupadded up to about $125 million, despite being rated AAA by Fitch.Citation
last = Tomlinson
first = Richard
last2 = Evans
first2 = David
title = CDOs mask huge subprime losses, abetted by credit rating agencies
newspaper = International Herald Tribune
year = 2007
date = 2007-06-01
url = http://www.iht.com/articles/2007/05/31/bloomberg/bxinvest.php]
Standard & Poor's
A. M. Best
Dominion Bond Rating Service
Nationally Recognized Statistical Rating Organizations
* [http://www.fitchratings.com/ Fitch Ratings]
* [http://www.fitchtraining.com/ Fitch Training]
* [http://www.washingtonpost.com/ac2/wp-dyn/A5572-2004Nov22?language=printer Credit Raters Exert International Influence (washingtonpost.com)]
* [http://www.fitchratings.com/corporate/products/fitchProducts.cfm?detail=7 RSS Feed of Most Recent Fitch Press Releases]
* [http://www.alacrastore.com/publisher-rss/fitch-ratings Latest Fitch Reports]
* [http://db.riskwaters.com/public/showPage.html?page=209190 U.S. Credit: Fitch Ratings]
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