A/A2

AAA

DEFINITION of 'A/A2'

Usually the second- or third-highest rating that a rating agency assigns to a security or carrier. This rating signifies that there is a relatively low risk of default because the issuer or carrier is fairly stable. Investors and policyholders are therefore taking very little risk with these companies.

INVESTOPEDIA EXPLAINS 'A/A2'

The ratings assigned by the various ratings agencies are based primarily upon the insurer's or issuer's creditworthiness. This rating can therefore be interpreted as a direct measure of the probability of default. However, credit stability and priority of payment are also factored into the rating.

RELATED TERMS
  1. B2/B

    This is generally the highest rating assigned to a non-investment ...
  2. B3/B-

    One of the lower ratings that a ratings agency assigns to a security ...
  3. Moody's

    An independent, unaffiliated research company that rates fixed ...
  4. Fitch Ratings

    An international credit rating agency based out of New York City ...
  5. Ratings Service

    A company, such as Moody's or Standard & Poor's, that rates ...
  6. Standard & Poor's - S&P

    The world's leading index provider and the foremost source of ...
RELATED FAQS
  1. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  2. How can I find net margin by looking a company's financial statements?

    In finance and accounting, financial statements represent the fundamental means of analyzing a company's financial position, ... Read Full Answer >>
  3. What can working capital turnover ratios tell a trader?

    A company's working capital turnover ratio is traditionally positively correlated with business performance. A high, or better ... Read Full Answer >>
  4. What is a negative write-off?

    A negative write-off is a write-off conducted by a company or accountant after deciding not to pay back an individual or ... Read Full Answer >>
  5. What metrics can be used when evaluating a telecommunications company to ensure its ...

    Cash flow analysis has been transformed since the widespread introduction of statements of cash flow, and investors have ... Read Full Answer >>
  6. How do you record adjustments for accrued revenue?

    An accountant records adjustments for accrued revenues through debit and credit journal entries in defined accounting periods ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Analyst Recommendations: Do Sell Ratings Exist?

    Analyst reports can be an investor's best friend - but without knowing how to read them, you won't be able to fully utilize them.
  2. Personal Finance

    When To Trust Bond Rating Agencies

    Despite investor distrust, rating agencies can be helpful. Just be sure you use these ratings as a starting point.
  3. Personal Finance

    The Debt Ratings Debate

    Lack of competition and potential conflicts of interest have called the value of these ratings into question.
  4. Home & Auto

    A Brief History Of Credit Rating Agencies

    Credit rating agencies have a long history in this country. Learn about what they do and how were they developed.
  5. Retirement

    Stock Ratings: The Good, The Bad And The Ugly

    Stock ratings are both loved and reviled. Find out why they deserve equal measures of both.
  6. Mutual Funds & ETFs

    Mutual Fund Ratings: Are They Deceiving?

    Rating systems are a helpful - but not perfect - tool to help you find a winning fund.
  7. Fundamental Analysis

    Explaining the Common Size Income Statement

    A common size income statement expresses each account as a percentage of net sales.
  8. Professionals

    What Does an Auditor Do?

    An auditor ensures that organizations maintain accurate and honest financial records.
  9. Fundamental Analysis

    Calculating the Net Debt to EBITDA Ratio

    Financial analysts typically use the net debt to EBITDA ratio to determine a company’s ability to pay its debt.
  10. Economics

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.

You May Also Like

Hot Definitions
  1. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  2. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  3. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  4. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  5. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  6. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!