Valuation of Long-Term Debt Symbols

Aaa / AAA – Titles rated Aaa are considered to be of the highest quality. They carry the lowest degree of investment risk and are often referred to as “gold” (gilt-edged). Your interest payments are protected by a large margin or by an exceptionally stable margin and your principal is insured. While there may be changes in the various protection elements, the changes that can be visualized are very unlikely to fundamentally undermine the strong position of these bonds.

Aa / AA – Aa-rated titles are considered to be of high quality according to all standards. Together with the Aaa titles, they form the group commonly known as high-profile titles. Their rating is lower than that of the best bonds because their protection margins may not be as large as those of Aaa bonds or because the oscillations of the protection elements may have a greater amplitude, or there may be other elements present that indicate that your long-term risk may be greater than that of Aaa bonds.

A – A-rated securities have several favorable investment attributes and are considered to be upper-middle class bonds. The factors that give security to the principal and interest are considered adequate, but there may be certain elements present that suggest the vulnerability to a negative impact at some future time.

Baa / BBB – Securities classified as Baa are considered medium-class bonds (that is, they are not highly protected, but they also have no weak guarantees). Interest and principal payments on these securities appear to be adequate at the present time, but certain elements of protection may be insufficient, or may not be characteristically reliable over a longer period. These securities do not have exceptional investment characteristics and, in fact, demonstrate some speculative characteristics.

Ba / BB – Securities that receive a Ba rating are those that have speculative elements; your future cannot be considered quite secure. Often, the protection of interest and principal payments can be moderate and therefore are not very well preserved over good and difficult times in the future. The uncertainty of the position characterizes the securities in this category.

B – B-rated securities generally do not have the desirable investment characteristics. The likelihood of payment of interest and principal or the consistency of other terms of the contract over extended periods may be small.

Caa / CCC – Securities classified as Caa have a weak position. These securities may be in default or there may be dangerous elements relating to interest and principal.

Ca / CC – Ca rated securities represent highly speculative obligations. Generally, these bonds are in default or show other marked weaknesses.

C – Securities that are rated C are the lowest rated securities and can only be considered as having extremely poor prospects of ever reaching any investment category effectively.

Note: Numeric modifiers 1, 2 and 3 or signals for each generic classification category, from Aa to Caa. The modifier indicates that the bond is at the highest, middle or lowest end of the category, applies to senior bank bonds, senior policies and insurance claims claims, with original maturity of more than one year. Obligations that depend on support mechanisms, such as letters of credit and indemnity bonds, are excluded, unless explicitly classified.