Identification

A BBB credit rating is the lowest rating an institution can receive to be considered a non-speculative investment, reports creditguru.com. In general, "BBB" rated companies are unlikely to default on their loans, but are still susceptible to market conditions that could degrade their credit worthiness or reduce profits.

Expert Insight

Standard and Poors and Moody's are the two two major credit reporting agencies. The S&P rates BBB as medium risk on its scale. BBB ranks as a rough equivalent to Baa on Moody's scale, according to Forbes magazine's Investopedia.

Effects

A "BBB" credit rating, while not the highest rating, still attracts significant global investment, reports Investopedia. This helps companies raise capital for expansion and/or strengthen a nation's economy. For developing countries, credit ratings are essential for foreign investment.

Considerations

A "BBB" credit rating also applies to a government's ability to pay back any loan obligations or the general financial soundness of the country, reports Investopedia. For governments, ratings include the ability for debt repayment in non-native currency.

Misconceptions

A "BBB" credit rating does not necessarily mean that someone should buy or not, but merely offers a tool for investors to gauge the ability of an institution to repay debt, which is linked to better financial health, reports Investopedia.

Source:

CreditGuru.com; AAA Rating Scale

Investopedia; What Is A Corporate Credit Rating?