Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Rating agency definition

What does Rating agency mean? In legal practice, a rating agency (more precisely, a credit rating agency or CRA) provides opinions on the creditworthiness of issuers and specific debt instruments, expressed as credit ratings (for example, AAA to D). Lawyers rely on ratings when structuring loans and bonds, drafting covenants (investment‑grade tests, downgrade triggers), preparing prospectuses, setting eligibility criteria in securitisations and funds, and assessing regulatory capital and investment mandate requirements. “Rating agency” is a descriptive term; legislation uses and defines “credit rating agency” in the Credit Rating Agencies Regulation (EU) No 1060/2009, and in the UK’s onshored version. Supervision is by the FCA in the...

Credit ratings in debt capital markets: legal documentary criteria on enforceability, recourse and credit enhancement; tranche waterfalls; agent rating requirements; and downgrade implications

Published by a LexisNexis Banking & Finance expert

Practice notes

This Practice Note outlines the part ratings agencies play in the debt capital markets and sets out key documentary considerations for those agencies.

Rating agencies and their role

Rating agencies assign Credit ratings to issuers of Debt Securities for public or private use. Issuers—whether corporate, sovereign, financial or other entities—may themselves be rated. That rating may equally apply to any debt securities they issue and are directly responsible for, where no credit enhancements are in place. Debt securities can be rated separately from the issuer where the issuer is a company created specifically to issue the debt (a special purpose vehicle (SPV)) or where the instruments benefit from credit enhancements (eg a guarantee) that strengthen them beyond the issuer’s standing rating. A credit rating is obtained on application by the issuer to one or more rating agencies.

Rating agencies—key institutions

The international credit ratings market is dominated by three major institutions:

S&P, previously Standard & Poor’s
Moody’s
Fitch Ratings, known as Fitch

Each has its own rating system and methodology. A credit rating...

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Web page updated on 21/05/2026

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