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- Best Rating (lowest numerical value)
- Worst Rating (highest numerical value)
- Second Best Rating
- Average Rating
About Ratings Methodology
Each rating has a unique methodology that is used to determine its value. This section provides an explanation on the methodology used for rating.
Best Rating
The Best Rating methodology selects the rating which has the lowest numerical rating across all sources and sets it as the Gold Copy value. If two rating have the same numerical rating, then the first source selected in the hierarchy will be used.
For example:
Hierarchy
Order | Rating Source |
1 | Moody’s |
2 | Fitch |
3 | S&P |
Composite Rating List
Short Description | Long Description (Alpha Rating) | Short Description (Numeric Rating) | Long Description (Alpha Rating) |
1 | AAA | 8 | BBB+ |
2 | AA+ | 9 | BBB |
3 | AA | 10 | BBB- |
4 | AA- | 11 | BB+ |
5 | A+ | 12 | BB |
6 | A | 13 | BB- |
7 | A- | Etc. |
|
Data
| Moody’s Rating | Fitch Rating | S&P Rating | Composite Rating | ||||
Alpha | Numeric | Alpha | Numeric | Alpha | Numeric | Alpha | Numeric | |
Security 1 | Aa1 | 2 | AA+ | 2 | AA | 3 | AA+ | 2 |
Security 2 | A3 | 7 | AA | 3 | BBB | 9 | AA | 3 |
| Info |
|---|
| Note: the bolded values indicate which ratings source was used as a result of the compositing process. |
...
Security 2 – The Fitch rating of AA (3) was selected since it has the lowest numerical value. The numerical value of 3 was selected from the composite rating list and the associated alpha rating of AA was also selected.
Worst Rating
The Worst Rating methodology selects the rating which has the highest numerical rating across all sources identified in the hierarchy. If two ratings have the same numerical rating, then the first source selected in the hierarchy will be used.
For example:
Hierarchy
Order | Rating Source |
1 | Moody’s |
2 | Fitch |
3 | S&P |
Composite Rating List
Short Description (Numeric Rating) | Long Description (Alpha Rating) | Short Description (Numeric Rating) | Long Description (Alpha Rating) |
1 | AAA | 8 | BBB+ |
2 | AA+ | 9 | BBB |
3 | AA | 10 | BBB- |
4 | AA- | 11 | BB+ |
5 | A+ | 12 | BB |
6 | A | 13 | BB- |
7 | A- | Etc. |
|
Data
| Moody’s Rating | Fitch Rating | S&P Rating | Composite Rating | ||||
Alpha | Numeric | Alpha | Numeric | Alpha | Numeric | Alpha | Numeric | |
Security 1 | A3 | 7 | AA | 3 | BBB | 9 | BBB | 9 |
Security 2 | Aa2 | 3 | AA+ | 2 | AA | 3 | AA | 3 |
Security 3 | Ba1 | 11 | No Rating | A- | 7 | BB+ | 11 | |
| Info |
|---|
| Note: the bolded values indicate which ratings source was used as a result of the compositing process |
...
Security 3 – The Moody’s rating of Ba1 (11) is selected since it has the lowest numerical value. The numerical value of 11 was selected from the composite rating list and the associated alpha rating of BB+ was also selected.
Second Best Rating
The Second best methodology selects the rating which is the second highest numerical rating of a group. If all ratings that have been received have the same rating, then this methodology selects the rating based on the hierarchy order. If there are three ratings, and two of the ratings match, the first rating in the vendor hierarchy that matches one of these two ratings is used.
For example:
Hierarchy
Order | Rating Source |
1 | Moody’s |
2 | Fitch |
3 | S&P |
Composite Rating List
Short Description (Numeric Rating) | Long Description (Alpha Rating) | Short Description (Numeric Rating) | Long Description (Alpha Rating) |
1 | AAA | 8 | BBB+ |
2 | AA+ | 9 | BBB |
3 | AA | 10 | BBB- |
4 | AA- | 11 | BB+ |
5 | A+ | 12 | BB |
6 | A | 13 | BB- |
7 | A- | Etc. |
|
Data
| Moody’s Rating | Fitch Rating | S&P Rating | Composite Rating | ||||
Alpha | Numeric | Alpha | Numeric | Alpha | Numeric | Alpha | Numeric | |
Security 1 | A3 | 7 | AA | 3 | BBB | 9 | A- | 7 |
Security 2 | Aa2 | 3 | AA+ | 2 | AA | 3 | AA | 3 |
Security 3 | A2 | 6 | A- | 7 | A | 6 | A | 6 |
Security 4 | Ba1 | 11 | No Rating | A- | 7 | BB+ | 11 | |
Security 5 | No Rating | AAA | 1 | No Rating | AAA | 1 | ||
| Info |
|---|
| Note: the bolded values indicate which ratings source was used as a result of the compositing process. |
...
Security 5 – The Fitch rating of AAA (1) is selected since it is the only rating received. The numerical value of 1 was selected from the composite rating list and the associated alpha rating of AAA was also selected.
Average Rating
The Average Rating methodology calculates the average rating based on the valid ratings. The Average Rating methodology rounds the calculated rating to the nearest whole number using a “round half away from zero” methodology. This will round a calculated number of 2.5 to be 3 and 4.3 to be 4. After calculating the average numerical rating of the sources, this methodology will also look at a Gold Copy specified code category to find the closed match of equal or lesser value. The process will then assign this numerical and related alpha value to the composite rating.
For example:
Hierarchy
Order | Rating Source |
1 | Moody’s |
2 | Fitch |
3 | S&P |
Composite Rating List
Short Description (Numeric Rating) | Long Description (Alpha Rating) | Short Description (Numeric Rating) | Long Description (Alpha Rating) |
1 | AAA | 8 | BBB+ |
2 | AA+ | 9 | BBB |
3 | AA | 10 | BBB- |
4 | AA- | 11 | BB+ |
5 | A+ | 12 | BB |
6 | A | 13 | BB- |
7 | A- | Etc. |
|
Data
| Moody’s Rating | Fitch Rating | S&P Rating | Average | Composite Rating | ||||
Alpha | Numeric | Alpha | Numeric | Alpha | Numeric |
| Alpha | Numeric | |
Security 1 | Aa2 | 3 | AA+ | 2 | AA+ | 2 | 2.3 | AA+ | 2 |
Security 2 | A3 | 7 | AA- | 4 | BBB | 9 | 6.6 | A- | 7 |
Security 3 | Ba1 | 11 | No Rating | A- | 7 | 9 | BBB | 9 | |
Security 4 | No Rating | AAA | 1 | No Rating | 1 | AAA | 1 | ||
| Info |
|---|
| Note: the bolded values indicate which ratings source was used as a result of the compositing process. |
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