What is a CC credit rating?

A credit rating given by Moody's to a prospective borrower that's not of investment grade and implies a very high degree of risk. Sometimes known as a CA rating by S&P, it suggests a company or government is very vulnerable to adverse economic conditions, and has a sizeable chance of defaulting on its debts at short notice.

Since there's an imminent threat of default, bonds with a CC score are deemed extremely speculative investments.

Where have you heard about CC credit ratings?

CC is very near the bottom of the credit ratings table. It's only a couple of rungs higher than D, which is generally the lowest score that can be handed out by a ratings agency. You may hear CC-rated bonds referred to as junk bonds, since they are highly risky and tend to be less popular with investors.

What you need to know about CC credit ratings.

The credit rating given to a company or government can impact on its ability to borrow money. Very high-risk ratings like CC don't generally appeal to investors, compared with investment-grade ones (BBB- or above). CC ratings are given to entities which are already struggling to cover all their debt commitments and may face problems if economic conditions change.

To become more appealing to investors, bonds with a CC rating frequently offer higher returns than investment-grade bonds. This aims to make up for the higher risk which investors will face.

Find out more about CC credit ratings.

CC is a long way off the top credit rating of AAA. For more on this, see AAA (credit rating).