Rating Agency | Long Term (LT) Rating | |||
Foreign Currency | Domestic Currency | |||
LT Rating | Outlook | LT Rating | Outlook | |
Fitch Ratings | A- | Stable | A- | Stable |
Moody's | A3 | Stable | A3 | Stable |
Standard & Poor's | A- | Positive | A- | Positive |
EU Member States and Candidate Countries |
Core functions
- Monetary policy
- Financial assets management
- Financial stability
- Supervision
- Resolution
- Payment system
- International relations
Credit rating of the Republic of Croatia
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.
Sovereign Long-Term Ratings
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 | |||
RD/D | C | SD/D | In default |
The agencies Fitch Ratings and Standard &Poor's assess long-term ratings within grades ranging from 'AAA' to 'D'. Ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the rating categories. Plus is assigned to the highest rating and minus to the lowest.
Moody's long-term ratings range from 'Aaa' to 'C'. Moody's appends numerical modifiers 1,2, and 3 to each generic rating classification from 'Aa' through 'Caa'. 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.