Aa2

What Is Aa2?

Aa2 is the third-highest long-term credit rating that ratings agency Moody's allocates to fixed-income securities, similar to bonds, that are of high quality with exceptionally low credit risk.

Understanding Aa2

The letters "Aa" is the generic rating classification and the number, in this case "2," alludes to the standing inside this class. As per Moody's, "Aa" means that the fixed income obligation is "decided to be of high quality and are subject to exceptionally low credit risk." The number "2" puts the obligation in the scope of that rating class.

The credit ratings assigned by the different ratings agencies, as Standard and Poor's, Moody's, and Fitch Ratings, measure the likelihood that the borrower may default. They depend essentially upon the guarantor's or alternately issuer's creditworthiness. Basically, the higher the rating, the almost certain the issuer is to meet their financial commitments and the lower the risk of default.

Moody's ratings, for instance, begin "Aaa" for prime bond issuers with the lowest risk and go down to "C," which is generally given to securities that are in default with minimal chance of the principal or interest being reimbursed. Aa2 is just below Aaa and Aa1, yet is above all the other things.

Highlights

• The letters, "Aa" in this case, address the generic rating classification, while the number, "2" in this case, alludes to the standing inside this classification.
• Aa2 is the third-highest long-term credit rating that Moody's doles out to high-quality fixed-income securities with exceptionally low credit risk.
• In the Moody's scale, Aa2 is just below Aaa and Aa1, however is above all the other things.