S&P redefines money market and bond fund credit ratings

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Standard & Poor's Ratings Services has renamed its money market fund and bond fund credit quality ratings as "Principal Stability" fund ratings and "Fund Credit Quality" ratings in the hope it will better reflect the meaning of associated investment classes.

Money market fund ratings will now be known as ‘principal stability’ ratings because S&P’s analysis is based on the stable net or accumulating asset value of each fund, however there will be no difference to the ratings symbols. Money market funds can be rated from AAAm – “a fund rated 'AAAm' has extremely strong capacity to maintain principal stability and to limit exposure to principal losses due to credit, market, and/or liquidity risks” says S&P while a Dm fund “has failed to maintain principal stability resulting in a realized or unrealized loss of principal”. Change from the "bo...

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