Risk Rating

The Company Watch Risk Rating, which is based on the 1 year PoD®, places a company into a scale of one of ten risk categories. The boundaries of each range double with each step along the Risk Rating scale, so, for example, the riskiest company in Risk Rating 5 has double the likelihood of distress compared with the riskiest company in Risk Rating 4. The latter, in turn, has double the likelihood of distress compared with the riskiest company in Risk Rating 3, and so on. Risk Rating 1 indicates that the risk is in the lowest range. Risk Rating 10 indicates that the risk is in the highest range.