Jurisdiction(s):
United Kingdom

Key definition

Credit rating definition

What does Credit rating mean? In legal practice, a credit rating is an independent opinion of creditworthiness, given as an issuer credit rating or an issue-specific rating, typically expressed on a scale (for example AAA–D), distinguishing investment-grade from sub-investment-grade risk, and often with outlook/watch status. It is used to assess investment risk, pricing and eligibility in transactions and regulation. The term is broadly descriptive across finance and capital markets, but is defined for regulatory purposes in the Credit Rating Agencies Regulation (EU) No 1060/2009 (as retained in the UK) as an opinion of creditworthiness issued using an established ranking system. In the UK,...

Credit Ratings: Role, Agencies, Instruments, Methodologies, Conflicts, Downgrades and Legal Limits on Reliance

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Role

The role of Credit rating agents (CRAs) is to deliver an independent, analytical view of the likelihood of payment default, by assessing multiple factors that guide Investors on whether to commit to specific Securities. Capital market investors are highly sensitive to risk, and some are constrained by their internal constitutional documents from investing in lower grade instruments. As a rule, the greater the investment risk, the higher the return (interest/Coupon) demanded by investors. Ratings may apply to both the company issuing the instruments and the instruments themselves. An issuer’s debt can be rated apart from the issuer, for example where the issuer is a special purpose vehicle created solely for the issuance, or where the debt benefits from credit enhancements (eg a guarantee) that lift it above the issuer’s own standing rating.

For example, the following can be rated:

the issuer
senior debt/syndicated loans
medium term notes (MTNs)
commercial paper (CP)
fixed income securities
sovereign debt
residential mortgage backed securities (RMBS)
commercial mortgage backed securities (CMBS)

CRAs typically consider qualitative, quantitative and legal factors to decide on...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Web page updated on 22/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...