An Aaa.xx rating indicates an issuer or issue with the strongest creditworthiness and the lowest likelihood of credit loss relative to other domestic obligors. The loss expectation can be significantly higher than apparently similar rating levels on Moodys global scale. The traditional concept of investment grade that is applied in the international markets cannot necessarily be applied even to the highest national scale ratings.
National scale ratings take into account all credit risks that bear on timely and full payment of a debt obligation, including sovereign related risks such as relative vulnerability to political developments, national monetary and fiscal policies, and, in rare cases, foreign currency convertibility and transfer risk. Certain extreme events, such as a local currency payment system disruption, are largely extraneous to the analysis (at least as a differentiating factor) since all issuers would probably be equally affected by such a failure. In other extreme cases, such as a government rescheduling or moratorium on local or foreign currency debt obligations, issuers or issues with higher ratings should be relatively more insulated from such an event; nonetheless, in such a situation, even the highest-rated entities may be at risk of temporary default.
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