When a company, government agency or municipality issues any debt security, a credit rating is usually sought. The rating is published so investors can judge the creditworthiness of the issuer and gauge the risks associated with buying its debt.

There are several credit rating agencies that provide a thorough analysis of an issuer's finances and assign a rating according to their findings. The rating is typically reviewed and restated quarterly, with full analysis annually for higher volume issuers.

The three main credit rating agencies are Moody's, Standard & Poor's and Fitch Ratings. The bond rating process begins with an initial meeting between an agency's analyst and the company's management to review financial statements. Financial strength ratios are calculated to help the analyst determine the likelihood of the indenture being repaid. After the analyst judges the financial strength of the company, a board of ratings analysts meets to collaborate on finding an appropriate rating for the issuer's current state. The final rating is revealed to the issuer and the public via press release.

After the initial rating, the assigned analyst keeps in contact with the issuing company's finance team and reviews its rating periodically. Ratings are often reviewed each quarter—in which upgrades or downgrades are possible—after a company releases quarterly earnings information.