Ba2/BB

Ba2/BB are rating designations by Moody's Investor Service and S&P Global Ratings, respectively, for a credit issue or an issuer of credit that signify higher degrees of default risk on the rating agencies' rating spectrums. Ba2/BB are ratings below investment-grade.

The Ba2/BB rating, as well as all other ratings set by Moody's and S&P, have descriptive guidelines. Ratings apply to both the credit instrument that is issued and the issuer of the credit instrument.

Issue*: For Moody's, an issue rated Ba2 is judged to be speculative and [is] subject to substantial credit risk. The modifier '2' indicates that the obligation ranks in the middle of its generic rating category. For S&P, an issue rated BB is regarded as having significant speculative characteristics and while such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

Issuer*: For Moody's, issuers assessed Ba2 are judged to be speculative and are subject to substantial risk of defaulting on certain senior operating obligations and other contractual commitments. For S&P, an obligor rated BB faces major ongoing uncertainties and exposure to adverse business, financial or economic conditions, which could lead to the obligor's inadequate capacity to meet its financial commitments.

(*sources: Moody's Investor Service, S&P Global Ratings)

When a company wants to issue a bond to raise money for any one of many purposes, it typically seeks out the services of the rating agencies (Moody's and S&P are the two major ones, but there are others) to designate their credit opinions on the bond issue and the issuer itself. The ratings will assist in the price discovery process of the bond when it is marketed to investors. A Ba2/BB rating is below investment-grade, or sometimes referred to as high-yield or junk; therefore, the yield on the bond should be higher than on an investment-grade security to compensate for the greater risk of payment default that the bond investor is taking on. The issue and issuer usually have the same rating, but they could be different if, for example, the issue is enhanced with additional credit protection for investors. The bond may be rated Ba1/BB+, a tier higher, with the issuer remaining at Ba2/BB.