Negative Watch

DEFINITION of 'Negative Watch'

A status that the credit-rating agencies (Standard and Poor's, Moody's and Fitch) give a company while they are deciding whether to lower that company's credit rating. Once a company has been placed on negative watch, it has a 50% chance of its rating being lowered in the next three months.

BREAKING DOWN 'Negative Watch'

When a company's credit rating is downgraded, it is considered likely to underperform compared to its peers. Having its credit rating downgraded is a big blow for a business because it will have to pay a higher rate of interest to convince investors to lend it money, if it can convince them at all. Entire countries can also be placed on negative watch.

RELATED TERMS
  1. Corporate Credit Rating

    The opinion of an independent agency regarding the likelihood ...
  2. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
  3. Moody's

    An independent, unaffiliated research company that rates fixed ...
  4. Insurance Company Credit Rating ...

    The opinion of an independent agency regarding the financial ...
  5. Fitch Ratings

    An international credit rating agency based out of New York City ...
  6. Bond Rating Agencies

    Companies that assess the creditworthiness of both debt securities ...
Related Articles
  1. Markets

    Explaining Credit Ratings

    A credit rating is a third-party assessment about the creditworthiness of an individual or entity.
  2. Personal Finance

    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.
  3. Markets

    What Is A Corporate Credit Rating?

    Is the bond you're buying investment grade, or just junk? Find out how to check the score.
  4. Insights

    Japan’s Sovereign Debt Outlook Lowered by Fitch

    Japan is the largest indebted country with government debt as a percentage of GDP touching 229% at the end of 2015.
  5. Markets

    Moody’s Cuts China Credit Outlook to ‘Negative’

    Moody’s changed China's credit outlook from ‘stable’ to ‘negative’, citing worries about economic slowdown and weakening foreign currency reserves.
  6. Markets

    Brexit May Spread Credit Contagion Through Europe

    Britain's AAA credit rating is likely to be downgraded by Standard & Poor's following the historic vote to leave the EU
  7. Investing

    The Power of Major Credit Rating Agencies

    The performance of major independent credit rating agencies is a controversial topic, particularly due to the strength of their influence.
  8. Insights

    Moody's Downgrades 3 Gulf Countries' Credit

    Moody's downgraded the credit ratings of three Gulf countries over the weekend.
  9. Markets

    Brexit Weighs on Moody’s UK Debt Rating Decision

    Brexit will keep Moody's review of the UK's credit rating in a holding pattern.
  10. Markets

    Moody’s Downgrades Australia State's Credit

    Moody’s downgrades Western Australia's credit rating due to weakening financial risk profile, rising budget deficits, debt burden and declining state revenues.
RELATED FAQS
  1. What are the benefits of credit ratings?

    Credit ratings are an important tool for borrowers to gain access to loans and debt. Good credit ratings allow borrowers ... Read Answer >>
  2. How important is credit rating on a fixed income security?

    Learn how credit ratings for fixed-income securities impact the yield and provide guidance for the amount of risk for the ... Read Answer >>
  3. Does a good credit rating guarantee repayment?

    Learn how credit ratings help investors determine the creditworthiness of an issuer and the risk associated with making an ... Read Answer >>
  4. What's the difference between a credit bureau and a credit rating agency?

    Learn the differences between credit bureaus that report on individuals' creditworthiness and credit rating agencies that ... Read Answer >>
  5. How long are credit ratings valid?

    Learn how credit ratings are issued and how long they are valid. Investors look to credit ratings to determine risk associated ... Read Answer >>
  6. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center