Aa2
Aa2 is the third-highest long-term credit rating that ratings agency Moody’s assigns to fixed-income securities, like bonds, that are of high quality with very low credit risk. Aa2 is the third-highest long-term credit rating that ratings agency Moody’s assigns to fixed-income securities, like bonds, that are of high quality with very low credit risk. Aa2 is the third-highest long-term credit rating that Moody’s assigns to high-quality fixed-income securities with very low credit risk. Essentially, the higher the rating, the more likely the issuer is to meet their financial commitments and the lower the risk of default. In the Moody's scale, Aa2 is just below Aaa and Aa1, but is above everything else.
What Is Aa2?
Aa2 is the third-highest long-term credit rating that ratings agency Moody’s assigns to fixed-income securities, like bonds, that are of high quality with very low credit risk.
Understanding Aa2
The letters "Aa" is the generic rating classification and the number, in this case "2," refers to the standing within this class. According to Moody's, "Aa" signifies that the fixed income obligation is "judged to be of high quality and are subject to very low credit risk." The number "2" places the obligation in the middle of the range of that rating class.
The credit ratings assigned by the various ratings agencies, like Standard & Poor's, Moody’s, and Fitch Ratings, measure the probability that the borrower may default. They are based primarily upon the insurer's or issuer's creditworthiness. Essentially, the higher the rating, the more likely the issuer is to meet their financial commitments and the lower the risk of default.
Moody's ratings, for example, start "Aaa" for prime bond issuers with the lowest risk and go down to "C," which is usually given to securities that are in default with little chance of the principal or interest being repaid. Aa2 is just below Aaa and Aa1, but is above everything else.
Related terms:
A+/A1
A+/A1 are middle-tier credit ratings assigned to long-term bond issuers by Moody's and S&P, respectivel. read more
A- / A3
A-/A3 are similar rating categories issued by two different rating agencies, Moody's and S&P, to reflect long-term investment bond creditworthiness. read more
AA+ Vs. Aa1: What's the Difference?
AA+ is the second-highest bond rating assigned by rating agency S&P while Aa1 is the equivalent from Moody's. Both signify a low-risk investment. read more
Ba2/BB
Ba2/BB are ratings by Moody's Investor Service and S&P Global Ratings, respectively, for a credit issue or an issuer of credit below investment grade. read more
Creditworthiness
Creditworthiness is how a lender determines that you will default on your debt obligations or how worthy you are to receive new credit. read more
Credit Rating
A credit rating is an assessment of the creditworthiness of a borrower—in general terms or with respect to a particular debt or financial obligation. read more
Default
A default happens when a borrower fails to repay a portion or all of a debt, including interest or principal. read more
Fitch Ratings
Fitch is an international credit rating agency based out of New York City and London that is often used as an investment guide to stocks promising a solid return. read more
Fixed Income & Examples
Fixed income refers to assets and securities that bear fixed cash flows for investors, such as fixed rate interest or dividends. read more