B3/B-

DEFINITION of 'B3/B-'

One of the lower ratings that a ratings agency assigns to a security or insurance carrier. This rating signifies a higher risk of default and greater risk to investors or policyholders. Entities that receive this rating are often experiencing financial instability or hold inadequate cash reserves.

BREAKING DOWN 'B3/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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RELATED FAQS
  1. Should I be worried about my insurance company?

    Yes, policyholders should also take a serious look at the financial stability of their current insurance company especially ... Read Answer >>
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    Learn how credit ratings are issued and how long they are valid. Investors look to credit ratings to determine risk associated ... Read Answer >>
  3. How important is credit rating on a fixed income security?

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  4. What level of default rate is typical for the credit services industry?

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