Standard & Poor’s (S&P) is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian S&P/TSX, the Italian S&P/MIB and India’s S&P CNX Nifty. The company is one of the Big Three credit-rating agencies, which also include Moody’s Investor Service and Fitch Ratings.Its head office is located on 55 Water Street in Lower Manhattan, New York City.
The company traces its history back to 1860, with the publication by Henry Varnum Poor of History of Railroads and Canals in the United States. This book was an attempt to compile comprehensive information about the financial and operational state of U.S. railroad companies. Henry Varnum went on to establish H.V. and H.W. Poor Co. with his son, Henry William, and published annually updated versions of this b
In 1906, Luther Lee Blake founded the Standard Statistics Bureau, with the view to providing financial information on non-railroad companies. Instead of an annually published book, Standard Statistics would use 5″ x 7″ cards, allowing for more frequent updates.
In 1941, Poor and Standard Statistics merged to become Standard & Poor’s Corp. In 1966, the company was acquired by The McGraw-Hill Companies, and now encompasses the Financial Services division.
As a credit-rating agency (CRA), the company issues credit ratings for the debt of public and private corporations. It is one of several CRAs that have been designated a nationally recognized statistical rating organization by the U.S. Securities and Exchange Commission.
It issues both short-term and long-term credit ratings.
Sovereigns listings by Standard & Poor’s as of August 2011.
|Green – AAA
Turquoise – AA
|Lighter blue – A
Darker blue – BBB
|Purple – BB
Red – B
|Grey – not rated|
S&P’s ratings of European countries (June 2011).
The company rates borrowers on a scale from AAA to D. Intermediate ratings are offered at each level between AA and CCC (e.g., BBB+, BBB and BBB-). For some borrowers, the company may also offer guidance (termed a “credit watch”) as to whether it is likely to be upgraded (positive), downgraded (negative) or uncertain (neutral).
Non-Investment Grade (also known as junk bonds)
The company rates specific issues on a scale from A-1 to D. Within the A-1 category it can be designated with a plus sign (+). This indicates that the issuer’s commitment to meet its obligation is very strong. Country risk and currency of repayment of the obligor to meet the issue obligation are factored into the credit analysis and reflected in the issue rating.
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