Bond Ratings

Complete Explanation of Municipal Bonds Ratings:

Moody's Bond Ratings and S&P Ratings

The two major bond ratings agencies in the municipal bonds market are: Moody's Investors Service (Moody's Bond Rating) and Standard & Poor's (S&P Ratings) Their ratings are commonly known as Moodys ratings and S&P ratings.

When investing tax free, these bond ratings will help decide the creditworthiness of the municipal bonds in consideration. Both bond ratings agencies use alphanumeric ratings.

Note:
Moody's bond ratings use numerical modifiers 1, 2 and 3 in each generic bond ratings classification from Aa to Ccc.

The bond ratings modifier 1 indicates that the issuer ranks in the higher end of its generic bond ratings category;

The bond ratings modifier 2 indicates a mid-range; and

The bond ratings modifier 3 indicates its rank in the lower end of its generic bond ratings category.

S&P ratings apply a plus (+) or a minus (-) to signify subtle variations in credit quality.

• Moody's Ratings and S&P Ratings

Municipal Bonds Note Ratings

In some circumstances, either or both Moody's bond  ratings or S&P ratings may be revised or withdrawn entirely. Any such revision or withdrawal of such bond ratings may have an effect on bond market prices.