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An assessment of an issuer's or obligation's creditworthiness, accompanied in some cases by an outlook.
An agency reviews financial information, obligations and relevant business or economic conditions, then assigns and may update its rating. Issue-specific features such as payment priority or security can affect the result. An outlook or watch signals a possible direction or review status, not necessarily an immediate rating change. Symbols need the agency's definitions because similar lettering does not establish identical methods.
Suppose a company has a general issuer rating and issues both senior secured debt and junior debt. The secured issue may receive a different rating because its recovery prospects or ranking differ. If operating cash weakens, an agency might first change the outlook and later downgrade the rating. This hypothetical describes assessments at distinct stages, not certainty that either bond will default.
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