Looking after your money

What UDC’s AA- credit rating means

Standard & Poor’s is one of the world’s foremost providers of independent credit ratings and investment risk evaluation. UDC Finance has an AA- credit rating, considered “investment grade” by Standard & Poor’s.

An AA- credit rating denotes a very strong (see below) capacity to meet financial commitments; a rating that’s as strong as the major New Zealand trading banks.

The Standard & Poor’s Rating System

Investment grade

• Extremely strong capacity to meet financial commitments. ‘AAA’ is the highest issuer credit rating assigned by Standard & Poor’s.
• Very strong capacity to meet financial commitments. ‘AA’ differs from the highest-rated organisations only to a small degree.
• Strong capacity to meet financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than organisations in higher-rated categories.
• Adequate capacity to meet financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the organisation to meet its financial commitments

Speculative grade

• Less vulnerable to nonpayment than other speculative issues. However, major ongoing uncertainties or exposure to adverse business, financial, or economic conditions could lead to the organisation’s inadequate capacity to meet its financial commitments.
• More vulnerable to nonpayment than the organisations rated ‘BB’, but currently has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely impair the organisation’s capacity or willingness to meet its financial commitments.
• Currently vulnerable to nonpayment and is dependent upon favorable business, financial and economic conditions to meet financial commitments. In the event of adverse business, financial, or economic conditions, the organisation is not likely to have the capacity to meet its financial commitment.

Standard & Poor’s Financial Services LLC, provides independent financial information, analytical services, and credit ratings to the world’s financial markets. For more information on Standard & Poor’s, visit www.standardandpoors.com