Ratings outlooks and watch-lists

Three of the main Credit rating agents (CRAs) are: Moody's Investors, Standard & Poor's (S&P) and Fitch Ratings, and they periodically review ratings.

The CRAs can issue rating outlooks, which are opinions about the likely direction of a rating over the medium term (ie in the next 6 to 24 months) which can be:

1. •

   positive

2. •

   negative

3. •

   stable

4. •

   developing or evolving

Typically, the outlook specifies the rationale for the potential change and the extent of the potential change; the majority of outlooks are generally stable. In practice, if an issuer's creditworthiness is deteriorating and it is expected to default on a payment, it may be placed on negative outlook or negative watch to signal its credit rating may be downgraded. Being given a negative outlook or being placed on a watch-list of itself is not a rating action, but may be a precursor to it.

Watch-lists are used to indicate that a rating is under review for possible change in the short-term (usually within 90 days), specifically:

1. •

   a