DEFINITION of 'B2/B'

This is generally the highest rating assigned to a non-investment grade security or carrier. This rating signifies that the security or carrier is not creditworthy enough to be considered as an investment, and is therefore considered speculative. Investors or policyowners are taking a higher level of risk with this entity.

BREAKING DOWN 'B2/B'

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.

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    Credit ratings provide a useful measure for comparing fixed-income securities, such as bonds, bills and notes. Most companies ... Read Answer >>
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