A (credit rating)
What is an A credit rating?
A solid credit rating given to a prospective borrower. Sometimes known as an A2 rating, an A score suggests a company or government has decent cash reserves and stable finances. It shows they're unlikely to default on debt repayments, although they may be slightly vulnerable to changes in economic conditions.
The rating is applied to the bonds issued by an organisation.
Where have you heard about A credit ratings?
Credit ratings show how much risk can be expected from different investments. Although not as strong as the ratings in the AAA and AA tiers, an A score can still help attract investors to a company. You might have heard the credit ratings of various governments being discussed in the media following the 2008 financial crisis.
What you need to know about A credit ratings.
The credit rating given to a company or government can impact on its ability to borrow money. Solid credit ratings, like A, mean it should be fairly straightforward to find investors willing to lend cash. On the other hand, a low rating means it's seen as a riskier prospect, and it may have to offer investors higher returns.
By working towards an A rating, a firm may ultimately be able to borrow larger sums. Because they provide reassurance to investors that their money is largely secure, bonds with an A rating tend to offer smaller yields than those in lower tiers.
Find out more about A credit ratings.
The A rating can be found between A+ and A-. To learn more, see our definitions of A+ and A-.