AAA   –  HIGHEST CREDIT QUALITY:

‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. 

AA   –   VERY HIGH CREDIT QUALITY:

‘AA’ ratings denote a very low expectation of credit risk. The capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. 

A   –   HIGH CREDIT QUALITY:

‘A’ ratings denote a low expectation of credit risk. This capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. 

BBB   –   GOOD CREDIT QUALITY:

‘BBB’ ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment grade category. 

BB  –  SPECULATIVE:

‘BB’ ratings indicate that there is a possibility of credit risk developing, particularly as a result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade.  

B  –  HIGH SPECULATIVE:

‘B’ ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment. 

CCC, CC, C  –  HIGH DEFAULT RISK:

Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. A ‘CC’ rating indicates that default of some kind appears probable. ‘C’ ratings signal imminent default.

A1+ : Obligations supported by the highest capacity for timely repayment.  

A1  : Obligations supported by a strong capacity for timely repayment. 

A2 : Obligations supported by a satisfactory capacity for timely repayment, although such capacity may be susceptible to adverse changes in business, economic, or financial conditions. 

A3 : Obligations supported by an adequate capacity for timely repayment. Such capacity is more susceptible to adverse changes in business, economic, or financial condition than for obligations in higher categories.  

B  : Obligations for which the capacity for timely repayment is susceptible to adverse changes in business, economic, or financial conditions.  

C  :  Obligations for which there is an inadequate capacity to ensure timely repayment. 

D  :  Obligations which have a high risk of default or which are currently in default.

N.B.

A plus (+) or minus (-) may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to ‘AAA’ long-term rating category, to categories below ‘CCC’, or to short-term ratings.

AAA  : Highest Credit quality. The risk factors are negligible being only slightly more than for risk-free Government of Pakistan debt. 

AA+, AA, AA-  :  High credit quality. Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. 

A+, A, A- : Good credit quality. Protection factors are adequate. Risk factors may vary with the possible changes in the economy.  

BBB+, BBB, BBB- : Adequate credit quality. Protection factors are reasonable and sufficient. Risk factors arte considered variable if changes occur in the economy. 

BB+, BB, BB-  : Obligation deemed likely to be met when due. Protection factors are capable of weakening if changes occur in the economy. Overall quality may move up or down frequently within this category.  

B+, B, B- : Obligations deemed less likely to be met when due. Protection factors are capable of fluctuating widely if changes occur in the economy. Overall quality may move up or down frequently within this category or into higher or lower rating grade.

CCC : Considerable uncertainty exists towards obligations when due. Protection factors are scarce and risk may be substantial.  

CC  :   A high default risk. 

C    :   A very high default risk. 

D  :  Defaulted obligations.     

A-1+ : Highest certainty of timely payment short-term liquidity, including internal operating factors and / or access to alternative sources of funds, is outstanding and safety is just below risk free Government of Pakistan’s short-term obligations. 

A-1 :  High certainty of payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. 

A-2 :  Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. 

A-3  :   Satisfactory liquidity and other protection factors qualify issues as to investment grade. Risk factors are larger and subject to more variation. Nevertheless, timely payment is expected. 

B : Speculative investment characteristics. Liquidity may not be sufficient to ensure timely payment of obligations. 

C : Capacity for timely payment of obligations is doubtful 

D :  Defaulted obligations.

N.B.

A plus (+) or minus (-) is added to the rating symbols from   ‘AAA’ to ‘B’ to indicate relative standing within each of those rating categories.