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Credit ratings
What the letter grades on corporate debt mean, who issues them, and where they show up in filings, with Walmart's 10-K.
The short answer
A credit rating is a letter grade that a credit rating agency gives a company's debt, describing its view of how likely the borrower is to pay interest and principal on time. S&P Global and Fitch use AAA, AA, A, BBB and so on down; Moody's uses Aaa, Aa, A, Baa. Debt graded BBB- or Baa3 and higher is called investment grade. A credit rating is about the company's bonds, not its shares.
Who gives them
Credit rating agencies whose grades are used in SEC rules register as nationally recognized statistical rating organizations (NRSROs). The SEC's list includes S&P Global Ratings, Moody's Investors Service and Fitch Ratings, which grade almost every large US company, along with smaller agencies such as Kroll Bond Rating Agency and A.M. Best, which specializes in insurers. The company issuing the debt usually pays for the credit rating.
The scale
| S&P and Fitch | Moody's | Meaning |
|---|---|---|
| AAA | Aaa | Highest grade; very few companies |
| AA+, AA, AA− | Aa1, Aa2, Aa3 | Very high grade |
| A+, A, A− | A1, A2, A3 | Upper medium grade |
| BBB+, BBB, BBB− | Baa1, Baa2, Baa3 | Lowest investment grade |
| BB+ and below | Ba1 and below | Below investment grade, also called high yield |
Short-term debt such as commercial paper has its own scale: A-1+ and A-1 at S&P, P-1 at Moody's, F1+ and F1 at Fitch are the top grades. Agencies also publish an outlook (positive, stable or negative) that signals the likely direction of the next change.
Bond documents often turn the scale into a contract term. Amphenol's description of its notes, filed with its 10-K, defines “Investment Grade” as BBB- or higher by S&P and Baa3 or higher by Moody's.
Where a 10-K mentions them: Walmart
Not every company lists its credit ratings, but many do in the liquidity part of the MD&A. Walmart's 10-K for fiscal 2026 gives them in a small table:
| Agency | Commercial paper | Long-term debt |
|---|---|---|
| Standard & Poor's | A-1+ | AA |
| Moody's Investors Service | P-1 | Aa2 |
| Fitch Ratings | F1+ | AA |
The same section says a downgrade could increase its future borrowing costs or impair its access to capital and credit markets on acceptable terms, and lists what the agencies consider, including operating performance, total debt and business strategy.
Why companies care
- Interest cost. Lower-graded debt pays higher interest. Some loan agreements tie the rate directly to the credit rating: AT&T's 10-K describes credit lines whose interest margin moves depending on its senior unsecured long-term debt credit ratings.
- Who can buy. Many pension funds and insurers can hold only investment-grade bonds, so a cut below BBB- can force sales.
- Contract triggers. Bond terms and derivatives contracts can require collateral, or let holders sell bonds back, after a downgrade.
A credit rating describes the risk to lenders. It says nothing direct about the share price, and the agencies themselves describe their grades as opinions. Debt-to-equity and interest coverage are two of the figures they look at.
Common questions
What is a credit rating?
A credit rating agency's letter grade on a borrower's debt, describing how likely it is to be repaid on time. AAA (Aaa at Moody's) is the highest.
What does investment grade mean?
Debt graded BBB- or higher by S&P and Fitch, or Baa3 or higher by Moody's. Lower grades are called high yield or speculative grade.
Who are the main credit rating agencies?
S&P Global Ratings, Moody's Investors Service and Fitch Ratings. Several smaller agencies are also registered with the SEC as NRSROs.
Where can I find a company's credit rating?
Many companies list them in the liquidity section of the 10-K's MD&A, as Walmart does. The agencies also publish them on their own websites.
Does a credit rating apply to the stock?
No. It grades the company's debt. A downgrade can raise borrowing costs, but it isn't a view on the shares.
Disclosures
- Editor holdings
- The editor holds no position in any company named on this page. As of Nov 11, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Nov 9, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
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