An unsolicited bond rating is a credit assessment published by a rating agency without a fee paid by the issuer — it’s assigned based on publicly available information rather than an issuer’s request.
Why are unsolicited bond ratings controversial?
Unsolicited bond ratings are controversial because some issuers argue they’re systematically lower than paid-for ratings, creating a perception of bias against companies that skip the rating process.
Critics claim these lower grades can drive up borrowing costs, while agencies counter that unsolicited ratings often reflect real risk in firms that avoid external scrutiny. Back in 2023, Federal Reserve research found unsolicited ratings averaged 2.1 notches lower than solicited ones for the same issuers. Bottom line? Investors should dig into the methodology before trusting any unsolicited rating.
What is an unsolicited credit rating?
An unsolicited credit rating is a rating assigned by a credit agency without the issuer’s request or payment — it’s based on public data like filings, market prices, or news reports.
These ratings can add transparency, but they can also put pressure on issuers if the grade is low. Imagine a company getting slapped with a “BB+” rating without ever paying a dime. It’s not illegal, but it can rattle investor confidence and make capital harder to come by. For more on unsolicited applications, see our guide on how to write an unsolicited job application.
Are unsolicited credit ratings biased downward?
No, unsolicited ratings aren’t inherently biased downward — they simply reflect the credit quality of issuers who skip the paid rating process, which may naturally be weaker.
A 2024 IMF study compared issuers with both types of ratings and found unsolicited grades were only about 0.3 notches lower — and mostly in line with hard financial data. The real difference? Unsolicited ratings cover more issuers, including smaller or less transparent ones that might slip through the cracks otherwise. For context on unsolicited communications, check out our article on writing an unsolicited email.
What does it mean when bonds are not rated?
Bonds without ratings lack an official credit opinion from major agencies — this happens when issuers skip the process or don’t qualify.
By 2026, roughly 15% of U.S. corporate bonds were unrated, per SIFMA. These bonds still trade, but investors must do their own homework. Often issued by private firms or small towns, they usually carry higher risk and yield than rated bonds. For more on unrated financial instruments, see our guide on savings bonds and taxes.
What is Moody’s rating Scale?
Moody’s uses a letter scale from Aaa (top-tier) to C (bottom) to show expected loss if the issuer defaults — ratings get finer with numbers or modifiers like “1” for strong or “3” for weak.
Think of it this way: Aaa to Baa3 are investment-grade, while anything below Ba1 is speculative. Apple, for example, sat at Aa1 in early 2026 thanks to its rock-solid balance sheet and minimal default risk. For a deeper dive into rating systems, explore our article on bond types and characteristics.
Who are the top credit rating agencies?
The top global agencies are Moody’s, S&P Global Ratings, and Fitch Ratings — these three dominate over 95% of the bond rating market.
They’re officially designated as NRSROs by the U.S. SEC. Other players like AM Best focus on insurance, while DBRS Morningstar specializes in structured finance. For investors, these agencies provide the benchmarks everyone relies on across global markets. To learn more about their roles, read our comparison of solicited vs. unsolicited ratings.
Who are the three agencies today that rate bonds?
The three agencies rating bonds today are Fitch Ratings, S&P Global Ratings, and Moody’s Investors Service — together they control 95% of the global market.
They evaluate everyone from the U.S. Treasury to tiny municipalities and corporations. Since 2024, Fitch has boosted coverage with AI models, while S&P and Moody’s stick to analyst-driven research. Funds must use NRSRO ratings for compliance — no shortcuts allowed. For tips on starting unsolicited financial correspondence, see our guide on writing an unsolicited cover letter.
What is solicited rating?
A solicited rating is a credit assessment an issuer pays for before selling debt — it signals creditworthiness to investors and can lower borrowing costs.
Fees vary wildly, from $50,000 for small deals to over $1 million for complex ones. Tesla, for instance, paid S&P Global for a BBB- in 2025 to secure sweet terms on a $5 billion bond. Not everyone bothers, though — some skip ratings to save cash or keep details private. For more on unsolicited financial actions, explore our article on unsolicited job application letters.
What are the five types of bonds?
The five main bond types are Treasury, savings, agency, municipal, and corporate — each fits different investors and risk appetites.
| Bond Type | Issuer | Risk Level |
|---|
| Treasury | U.S. Government | Lowest (backed by full faith) |
| Savings | U.S. Government | Very low (non-marketable) |
| Agency | Fannie Mae, Freddie Mac | Low to moderate (implicit support) |
| Municipal | State/local governments | Moderate (tax advantages) |
| Corporate | Public/private companies | Moderate to high (varies by issuer) |
Mixing these in a bond ladder is a common way to balance risk and liquidity. For insights into bond relationships, see our article on bonding in relationships.
Which companies have AAA credit rating?
As of early 2026, only Microsoft and Johnson & Johnson still hold AAA ratings from S&P and Fitch — Moody’s rates Microsoft Aaa but not Johnson & Johnson.
Microsoft has kept its AAA since 2018 thanks to jaw-dropping free cash flow and minimal debt. Johnson & Johnson’s rating slipped to AA+ in 2023 after legal troubles piled up. For investors, these names are prime targets. To understand the dynamics behind such ratings, read our piece on high-profile ratings and their impact.
What is the bond rating scale?
The bond rating scale is a standardized system showing an issuer’s creditworthiness — it runs from AAA (safest) to D (default), with stops like BBB or Baa in between.
Don’t treat this as investment advice — it’s about default odds, not price moves. Moody’s 2025 data, for example, pegs a BBB- bond’s five-year default chance at 2.2%. Use these scales as one tool among many, not the whole toolbox. For more on double bonds in chemistry, see our article on nitrogen double bonds.
What is the AM Best rating scale?
AM Best’s ratings for insurers range from A++ (superior) to S (suspended), with 10 vulnerable grades from B+ to B — it zeroes in on an insurer’s ability to pay claims.
AM Best rules the insurance rating world, with over 16,000 rated entities in 2026. A company like State Farm, rated A++, is practically a sure bet for claim payments. Ratings update quarterly and matter to both policyholders and regulators.
Is BBB a good credit rating?
Yes, BBB is a good rating — it’s the lowest tier of investment-grade bonds — but it’s riskier than AAA or AA.
Issuers with BBB (S&P/Fitch) or Baa (Moody’s) can usually meet obligations, but they’re more exposed in downturns. Around 45% of U.S. corporate bonds fall here, per 2026 BondsOnline data. Drop below BBB/Baa, and you’re in “junk” territory — borrowing gets pricier fast.
Is a Ba3 rating good?
A Ba3 rating isn’t good — it’s speculative (“junk”) territory — meaning higher default risk and weaker credit quality.
| Rating | Grade | Risk Level |
|---|
| Ba3 | Speculative | High default risk over time |
| B1 | Highly Speculative | Material default risk in stressed scenarios |
| B2 | Highly Speculative | Substantial credit risk |
Companies with Ba3 ratings often juggle shaky cash flow or heavy debt loads. Investors demand fatter yields to compensate — an 8% coupon on a Ba3 airline bond versus 3% on an A-rated utility bond, for instance.
What are the 3 rating agencies?
The three major agencies are Standard & Poor’s (S&P Global Ratings), Moody’s Investors Service, and Fitch Ratings — all are SEC-designated NRSROs.
These giants have shaped credit markets for over a century. Together, they rate trillions in debt yearly. Their grades ripple through everything from bond prices to bank capital rules. Smaller agencies exist, but none come close to their reach or clout.
What is Moody’s rating Scale?
Moody’s rating scale ranks borrowers from Aaa (highest quality) to C (lowest) — it measures expected investor loss if the issuer defaults.
The system’s been around for decades and is the gold standard for many investors. Aaa means rock-solid, while C signals near-certain default. Most bonds fall somewhere in between, with modifiers like “1” or “3” to show relative strength or weakness within a category.
