Credit rating

Credit rating

Published: 27/10/2016
The three largest and best-known credit rating agencies are Fitch Ratings, Moody’s and Standard & Poor’s. All three assign the Republic of Croatia's sovereign credit rating.

The agencies define credit rating as an independent opinion on credit risk, i.e. as the assessment of the borrower's ability and willingness to fulfil his obligations fully and punctually.

When assigning government credit ratings, agencies take into account various criteria, including the following:

  • composition of economy and revenues,
  • expected economic growth,
  • monetary and fiscal flexibility,
  • foreign-currency liquidity,
  • political risk,
  • public and private sector debt position,
  • debt position of state-owned corporations.

Rating agencies formulate their opinions regarding the credit risk of a borrower or financial instrument in the form of credit ratings expressed by symbols, i.e. alphabetically, numerically or in a combination of the two.

Long-term ratings of rating agencies are divided in two main categories: investment grade and speculative grade.

Assessments of long-term obligations

Fitch Moody's S&P Description
Investment grade ratings
AAA Aaa AAA Highest credit quality
AA+ Aa1 AA+ High credit quality
AA Aa2 AA
AA– Aa3 AA–
A+ A1 A+ Above average credit quality
A A2 A
A– A3 A–
BBB+ Baa1 BBB+ Adequate credit quality
BBB Baa2 BBB
BBB– Baa3 BBB–
Speculative grade ratings
BB+ Ba1 BB+ Fulfilment of obligations uncertain
BB Ba2 BB
BB– Ba3 BB–
B+ B1 B+ Currently able to fulfill obligations, risk of future default
B B2 B
B– B3 B–
CCC+ Caa1 CCC+ Likelihood of default very high
CCC Caa2 CCC
CCC– Caa3 CCC–
CC Ca CC
C C C
DDD   D In default

The agencies Fitch Ratings and Standard &Poor's assess long-term ratings within grades ranging from AAA to D. All grades, except AAA, CC, C and D, are also modified by a plus (+) or minus (−) sign, where plus is assigned to the highest rating and minus to the lowest.

Moody's long-term ratings range from Aaa to C. All grades, except Aaa, Ca and C, are appended by numbers 1, 2 or 3. The number 1 indicates the highest rating in the category, while number 3 indicates the lowest.

Agencies' long-term ratings are accompanied by an outlook, which can be positive, stable or negative. The outlook indicates the prospects for changes in a country's credit rating.

Credit rating of the Republic of Croatia

Credit rating of the Republic of Croatia

Published: 3/1/2011 Modified: 26/6/2017
Rating Agency Long Term (LT) Rating
Foreign Currency Domestic Currency
LT Rating Outlook LT Rating Outlook
Fitch Ratings BB Stable BB Stable
Moody's Ba2 Stable Ba2 Stable
Standard & Poor's BB Stable BB Stable
EU Member States and Candidate Countries