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Making a list ahead of time can help you compare everything side by side.Jupiterimages/Photos.com/Getty Images
Make a list of the different companies or bonds you would like to compare, and include the rating given by both Moody's and S&P. You can find ratings from both agencies on their respective websites, although both require a free registration. You can also find bond ratings on market analysis pages, such as the Wall Street Journal Market Data Center, which includes ratings from Moody's, S&P and Fitch (another rating agency) in its information for individual companies (see References). - 2). Refer to a comparison chart to see the different types of ratings for both Moody's and S&P (see Resources).
Generally, S&P and Moody's follow a very similar format. Both begin with AAA (the highest rating) and progress down to C (Moody's) or D (S&P), meaning the bonds are or may be in default. For more specific ratings, S&P uses + and - signs, while Moody's uses 1, 2, and 3. Moody's also only capitalizes the first letter. For example, an Aa1 from Moody's would be equivalent to an AA+ from S&P, and an Aa3 from Moody's would be equivalent to an AA- from S&P.
Moody's uses lowercase a's after the main rating letter (even if it is B or C) rather than repeating the rating letter the way S&P does. So a Baa from Moody's is equivalent to a BBB in S&P, and a Ba1 from Moody's is equivalent to a BB+ from S&P. - 3). Look for any ratings that don't match each other on the comparison chart. Make sure to research any discrepancy between the ratings given by the two rating agencies, because it could mean that current events are affecting the bond's rating somehow, which could be an indicator of more changes to come.
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