Who owns fitch rating agency

A corporate bond is a debt instrument or IOU from a company that investors can buy and, in doing so, pay the company the value of the bond upfront, which is called the principal amount. In return, the company pays the investor interest called a coupon rate on the bond's principal amount via periodic interest payments.

At the bond's maturity date , which is typically in one to five years, the principal is paid back to the investor. Before investors buy a corporate bond, they need to know how financially stable the company is that's issued the bond.

In other words, investors need to know whether the company will be able to meet its financial obligations. If a company didn't pay back its investors the bond's principal amount, the corporation would be considered in default, or nonpayment, of the bond. The risk that a company might not pay back the principal amount of a bond is called default risk. As investment opportunities become more global and diverse, it is difficult to decide not only which companies but also which countries are good investment opportunities.

There are advantages to investing in foreign markets , but the risks associated with sending money abroad are considerably higher than those associated with investing in your domestic market. It is important to gain insight into different investment environments and to understand the risks and advantages these environments pose.

Credit ratings are essential tools for helping investors make more informed investment decisions. Each of these agencies aims to provide a rating system to help investors determine the risk associated with investing in a specific company, government, agency, investment instrument, or market.

Ratings can be assigned to short-term and long-term debt obligations that are issued by a government or a corporation, including banks and insurance companies.

For a government or company, it is sometimes easier to pay back local-currency obligations than to pay foreign-currency obligations. The ratings, therefore, assess an entity's ability to pay debts in both foreign and local currencies. A lack of foreign reserves, for example, may warrant a lower rating for those obligations a country made in a foreign currency.

Ratings are not equal to or the same as buy, sell, or hold recommendations. Ratings measure an entity's ability and willingness to repay debt. For long-term issues or instruments, the ratings lie on a spectrum ranging from the highest credit quality on one end to default or " junk " on the other. A triple-A AAA is the highest credit quality, and C or D depending on the agency issuing the rating is the lowest or junk quality. Within this spectrum, there are different degrees of each rating, which are, depending on the agency, sometimes denoted by a plus or negative sign or a number.

Thus, for Fitch Ratings, a "AAA" rating signifies the highest investment grade and means that there is a very low credit risk. These ratings are considered to be investment grade , which means that the security or entity being rated carries a high-enough quality level for most financial institutions to make investments in those securities.

BBB is the lowest rating of investment-grade securities, while ratings below "BBB" are considered speculative or junk. Some investors and financial firms will not or cannot invest in bonds rated "junk. As previously mentioned, a rating can refer to an entity's specific financial obligation or its general creditworthiness. A sovereign credit rating provides the latter, as it signifies a country's overall ability to provide a secure investment environment. This rating reflects factors such as a country's economic status, transparency in the capital markets, levels of public and private investment flows, foreign direct investment , foreign currency reserves , political stability, or the ability for a country's economy to remain stable despite political change.

A sovereign credit rating is an indication of the viability of a country's investment markets, and as a result, is typically the first metric that most institutional investors look at before investing internationally.

The rating provides investors with the risk level associated with investing in the country. Most countries strive to obtain a sovereign rating, including investment grade, to attract foreign investment. While the rating agencies provide a robust service, the value of such ratings has been widely questioned since the financial crisis.

A key criticism is that the issuers themselves pay the credit rating agencies to rate their securities. This became particularly important as the surging real estate market peaked in , a significant amount of subprime debt was being rated by the agencies. Our learning solutions encompass expert faculty, e-learning, coaching and blended candidate assessments, improving individual contribution and collective business performance.

Supporting Fitch Ratings, Fitch Solutions and Fitch Learning, Fitch Ventures looks to make investments in innovative and emerging technology companies in the financial services industry to service the institutional credit and risk management marketplaces.

At Fitch, our people draw on over years of experience We have breadth and depth across our global team, allowing us to deliver value to our clients. Learn More. Find out More. Business Heads. Beginning of dialog window. Escape will cancel and close the window. This modal can be closed by pressing the Escape key or activating the close button. Our people are credit experts, experienced professionals, and global citizens who collaborate in offices in over 30 countries, to help our clients and communities.

Inside Credit features the latest credit market research, with our weekly recap of noteworthy content across all sectors and regions. Courses cover corporate credit, bank and insurance company analysis, corporate finance, risk, and more. Fitch Wire U. Download Report. Fri 12 Nov, More Insights. Our approach. Learn More. Our Approach. Video Player is loading. Play Mute. Current Time