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Best's Debt Rating

Effective June, 23, 2009

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Read Guide to Best's Debt and Issuer Credit Ratings for complete details on the rating scale and definitions.


Also see sections on Financial Strength, Bank Deposit Ratings and Issuer Credit Ratings.

A Best's Debt Rating, assigned to specific issues such as debt and preferred stock, is an independent opinion of an issuer's ability to meet its ongoing financial obligations to security holders when due. It is based on a comprehensive quantitative and qualitative evaluation of a company's balance sheet strength, operating performance and business profile.

These ratings are assigned to securities issued by insurance companies, banks, hospital/health-care systems, holding companies or other legal entities authorized to issue financial obligations.

A.M. Best's rating process incorporates specific methodologies designed to address Best's Debt Ratings and the credit marketplace. Read A.M. Best's Ratings and the Treatment of Debt, which outlines the relationship between Best's Financial Strength Ratings, Issuer Credit Ratings and Debt Ratings. A complete list of Best's Credit Rating Methodologies is available.

A Best's Debt Rating is not a warranty of an entity's creditworthiness and ability to meet its financial obligations. View this Important Notice for complete details.

Understanding Best's Debt Ratings

Best's Debt Ratings (issue credit ratings) can be assigned on a long- or short-term basis. A Best's Long-Term Debt Rating is an opinion as to the issuer's ability to meet its financial obligations to security holders when due. These ratings are assigned to senior debt and preferred stock issues.

Long-Term Debt Ratings

Investment Grade

Non-Investment Grade

aaa (Exceptional)

bb (Speculative)

aa (Very Strong)

b (Very Speculative)

a (Strong)

ccc, cc, c (Extremely Speculative)

bbb (Adequate)

d (In Default)

Ratings from "aa" to "ccc" may be enhanced with a "+" (plus) or "-" (minus) to indicate whether credit quality is near the top or bottom of a category.

A Rating Outlook is assigned to an interactive Best's Long-Term Debt Rating (aaa to c) to indicate its potential direction over an intermediate term, generally defined as 12 to 36 months. A Rating Outlook can be:

Outlook Definition

Positive

Indicates possible rating upgrade due to favorable financial/market trends relative to the current rating level.

Negative

Indicates possible rating downgrade due to unfavorable financial/market trends relative to the current rating level.

Stable

Indicates low likelihood of a rating change due to stable financial/market trends.

A Best's Short-Term Debt Rating is an opinion as to the issuer's ability to meet its obligations having maturities generally less than one year. These ratings are assigned to securities such as commercial paper.

Short-Term Debt Ratings
Investment Grade Non-Investment Grade

AMB-1+ (Strongest)

AMB-4 (Speculative)

AMB-1 (Outstanding)

d (In Default)

AMB-2 (Satisfactory)

 

AMB-3 (Adequate)

 

Rating Modifiers may be assigned to both Long- and Short-Term Debt Ratings.

Modifier Descriptor Definition

u

Under Review

Indicates the rating may change in the near term, typically within six months. Generally is event driven, with positive, negative, or developing implications.

i

Indicative

Indicates rating assigned is indicative.

Not Rated Designation

The Not Rated (nr) designation may be assigned to issuers or issues that previously were rated.

Usage of Best's Ratings

Best's Credit Ratings are proprietary and may not be reproduced without permission from A.M. Best. A company assigned a Best's Credit Rating should review the Guide to Proper Use, which outlines the acceptable parameters of the use of these ratings.

All queries regarding the use of proprietary information or to obtain a licensing agreement or a letter of consent should be directed to:

A.M. Best Company, Office of Intellectual Property, Ambest Road, Oldwick, New Jersey 08858
Phone: 908-439-2200, extension 5644 or e-mail James.Peavy@ambest.com.

View our Legal and Licensing information for details on the use of A.M. Best trademarks, logos and service marks.

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