RATINGS DEFINITIONS

Rating Definition and Rating Scale

Definition of credit ratings

Credit ratings (or “ratings) issued by VAST are forward-looking opinions on the creditworthiness of an issuer or a specific financial obligation. They represent VAST’s assessment of the likelihood of timely payment of principal and interest and the potential for financial loss in the event of default. Credit ratings do not constitute buy, hold or sell recommendations or opinions on market price.  Credit ratings are assigned based on quantitative and qualitative analysis of information provided to VAST and, while VAST obtains information from sources it believes to be reliable, it does not perform an audit regarding and undertakes no duty of due diligence or independent verification of any information it receives. Credit ratings may be upgraded, downgraded, placed under review, discontinued, or withdrawn at any time.

Purpose and Scope

VAST Ratings has an Expected Loss Rating Scale that provides our analytical opinion of the given risk of the commitment. The Expected Loss Rating Scale applies to all our ratings globally. It should be read in conjunction with all other applicable policies and procedures.

Scale

The rating scale below additionally has “+” and “-“, except for the AAA, C, and D ratings. The added “+” means that the rating is slightly better to the given rating and the “-“ means that the rating is slightly worse than the given rating, in regards to credit quality and expected loss.

Rating Definition
AAA The commitment is of highest credit quality.
AA The commitment is of high credit quality.
A The commitment is of upper-medium credit quality
BBB The commitment is of medium credit quality.
BB The commitment is considered to have some speculative credit quality.
B The commitment is of speculative credit quality.
C The commitment is in default with potential of low-to-average principal losses.
D The commitment is in default with the potential of high principal losses.