Fitch

Definition

Fitch Ratings is a global credit rating agency that evaluates the creditworthiness of borrowers, including corporations, financial institutions, and governments. It provides investors with insights into the risk levels associated with different debt instruments.

5 Must Know Facts For Your Next Test

1. Fitch Ratings is one of the 'Big Three' credit rating agencies alongside Moody's and Standard & Poor's (S&P).
2. The agency uses a letter-grade system ranging from 'AAA' (highest credit quality) to 'D' (default).
3. Fitch was founded in 1914 by John Knowles Fitch in New York City.
4. The ratings provided by Fitch play a crucial role in determining interest rates on bonds and other debt instruments.
5. Investors and regulators often rely on Fitch Ratings for assessing the risk level in the financial markets.

Review Questions

• What are the main functions of Fitch Ratings?
• How does Fitch Ratings impact investor decision-making?
• What distinguishes Fitch from other major credit rating agencies?

Related terms

Moody's:

A leading global credit rating agency that provides international financial research on bonds issued by commercial and government entities.

Standard & Poor's (S&P): Another major credit rating agency that assesses the financial health of companies and government entities to determine their ability to meet debt obligations.

Credit Rating:

An assessment of the creditworthiness of a borrower in terms of their ability to pay back debt, typically represented by standardized scores or grades.