Short-Term Rating

A short-term rating is a credit rating assigned to debt securities or obligations with a maturity of one year or less. These ratings assess the likelihood that the issuer will meet its short-term financial commitments. Agencies like Moody’s, S&P, and Fitch provide short-term ratings, which are crucial for evaluating the risk associated with short-term debt instruments such as commercial paper or short-term bonds.

Example

A corporation issues 90-day commercial paper, and a credit rating agency assigns it a short-term rating of A-1, indicating strong confidence that the company can meet its short-term obligations.