What is a C credit rating?

A credit rating given to a prospective borrower that's not of investment grade and implies a very high degree of risk. It suggests a company is very vulnerable to adverse economic conditions and may be about to default on its debts.

The rating is applied to the bonds issued by an organisation. Since a default is very likely and a recovery is not guaranteed, bonds with a C score are extremely speculative investments.

Where have you heard about C credit ratings?

C is very near the bottom of the credit ratings table. In fact, it's the lowest rating offered by Moody's.

It's only slightly higher than D, which is the lowest score given out by the other major ratings agencies.

You may hear C-rated bonds referred to as junk bonds, since they are extremely risky for investors to take on.

What you need to know about C credit ratings.

The credit rating given to a company or government can impact on its ability to borrow money. Extremely high-risk ratings like C don't generally appeal to investors, compared with investment-grade ones (BBB- or above). C ratings are given to entities which are on the verge of failing to meet all their debt commitments, e.g. if they've just filed for bankruptcy.

Bonds with a C rating may offer higher returns to investors than those with stronger scores, in order to compensate them for the extra risk they'll be taking on.

Find out more about C credit ratings.

A C rating indicates an imminent threat of default. To learn more, see credit risk.