Thursday, August 27, 2009

Commercial paper ratings

Commercial paper is generally rated as prime, desirable, or satisfactory, depending, or satisfactory, depending on the credit standing of the issuing company. Firms desiring to issue paper generally will seek a credit rating from one or more of three rating services- Moody's investor service, standard &Poor's corporation, and Fitch investor service. Moody‘s assigns ratings of prime-1 (p-1) for the highest-quality paper, with lower-quality issues designated as prime-2 (p-2) or prime-3 (p-3). Standard& Poor's assigns ratings of A-1, A-2, A-3, while Fitch uses F-1, F-2, F-3.
it is extremely difficult in today‘s volatile conditions to market unrated commercial paper. Indeed, paper available is mainly from top-quality issuers; about three quarters of the firms currently selling notes bearing credit ratings from at least two rating agencies are preferred by both investors and dealers.

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