Investment BankingBeginner

Credit Rating

An independent opinion on how likely a borrower is to repay its debt on time.

Detailed explanation

In India, SEBI-registered agencies such as CRISIL, ICRA, CARE and India Ratings assign ratings from AAA (highest safety) downward.

Why it matters

Ratings drive the interest rate a company pays on bonds.

Key points

  • AAA is the highest safety.
  • Below BBB− is sub-investment grade.
  • Ratings can be upgraded or downgraded.

Related terms

Debt Capital MarketsBond Yield

More in Investment Banking

Investment BankingMergers & AcquisitionsEquity Capital MarketsDebt Capital MarketsPitch BookDiscounted Cash Flow

Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.