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Rd credit rating

RD (Credit Rating)

RD stands for "Restricted Default," a credit rating given by rating agencies to indicate that a borrower has defaulted on a specific financial obligation but is still making payments on other debt. This rating is typically assigned when a company or government misses a scheduled payment on one bond or loan but continues to meet other financial obligations. An RD rating signals financial distress but stops short of indicating a complete default.

Example

A company receives an RD rating after failing to make an interest payment on one of its bonds, even though it continues to meet payments on other loans.

Key points

• Indicates a borrower has defaulted on a specific obligation but is still meeting other debt payments.

• Signals financial distress without indicating a full default.

• Assigned by credit rating agencies to reflect partial default.

Quick Answers to Curious Questions

Why might a borrower receive an RD rating?

The borrower may have missed a payment on a specific bond or loan while continuing to meet other debt obligations, signaling financial difficulties.

How does an RD rating affect a company’s borrowing costs?

It increases borrowing costs, as investors perceive the borrower as risky due to the partial default.

What are the implications of an RD rating for investors?

An RD rating suggests that the borrower is in financial distress, prompting investors to reassess the risk of holding its debt.

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