Credit rating

Credit rating — a rating agency’s graded opinion of a borrower’s ability to repay: Moody’s/S&P/Fitch internationally, PhilRatings for local corporate issues (PRS Aaa down the scale, with an investment-grade/speculative cutoff). A corporate bond’s yield above the government curve — its credit spread — is payment for default and illiquidity risk, and the rating grades that risk. Course position at Level 2: the guaranteed layer stays in sovereign credit and PDIC-insured deposits; corporate credit is optional seasoning, never the base.

First used in: 2.3 · Bonds and the peso ladder