The McGraw-Hill Companies Logo
Investor
Fact Book 2009/2010
  • The McGraw-Hill Companies Reports 43.2%
    Increase in Fourth Quarter EPS (Jan 26) More
  • McGraw-Hill Increases Dividend; Will Resume
    Share Repurchase Program (Jan 20) More

S&P Credit Market Services:
Expanding World of S&P Ratings

From pre-issuance to post-issuance, financial decision makers are utilizing a growing range of S&P products and services to identify, measure, and manage credit risk. These S&P offerings are creating additional growth opportunities.

S&P rated over $3 trillion in new debt and published more than 1 million new and revised ratings in 2008

How Standard & Poor's Plays a Role in a Changing Market

S&P's Rating Track Record: Meeting the Test of Time

What is an S&P credit rating? It is an opinion about credit risk–the ability and willingness of an issuer to meet its financial obligations in full and on time. Credit ratings also indicate credit quality–the relative likelihood that an issue may default. S&P’s global ratings scale provides a benchmark for evaluating the relative credit risk of issuers and issues worldwide.

How S&P ratings perform: The tables (at right) show the default rates experienced for each rating category over many years. For example, the 5-year cumulative default rate for a corporate bond rated AAA has been 0.27%, or less than three defaults for every 1,000 ratings. The 5-year cumulative default rate for AAA-rated structured finance issues has been 0.18%, or less than 2 per 1,000. The tables underscore another key point:
Over time, the higher the S&P rating, the fewer defaults have been experienced.

Global Corporate Cumulative Average Default Rates(a) (1981 - 2008)(%)
Global Structured Finance Cumulative Average Default Rates(a,b) (1978 - 2008)(%)