Issuer rating
A credit rating of the issuer's senior unsecured debt, standing for its general creditworthiness. Ratings of particular issues are notched above or below it for seniority and expected recovery.
Where you will meet it
Issuer rating appears in 2 learning outcomes on the CFA syllabus. A few of them:
- Explain credit ratings, notching and where ratings fall short
“Notching adjusts an individual issue up or down from the issuer rating to reflect its seniority and any structural subordination — debt at an operating subsidiary ranks ahead of debt at a holding company whose only asset is the subsidiary's equity.”
- Explain credit ratings and credit scores
“Issue ratings can be notched above or below the issuer rating to reflect seniority and expected recovery.”
Practise it
Practise issuer rating until it is automatic: questions that explain every wrong option.
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