The “positive” rating watch designation means that a rating may be raised; “negative” rating watch listing means a rating may be lowered; and “developing” rating watch listing means that a rating may be raised, lowered, or affirmed.
A positive outlook is to be distinguished from a positive watchlisting. A positive outlook may be based on a completed assessment process that is resumed only when new information is to be considered.
A rating outlook indicates a view regarding the potential direction of a long-term credit rating over the intermediate term (typically six months to two years). In determining a rating outlook, consideration is given to any changes rating analysts see in the economic and/or fundamental business/financial conditions.
An outlook is not necessarily a precursor of a rating change or future rating action.
- “Positive” means that a rating may be raised.
- “Negative” means that a rating may be lowered.
- “Stable” means that a rating is not likely to change.
- “Developing” means a rating may be raised or lowered.
Rating outlooks (other than stable) and watchlistings are used in a changing credit situation when a rating change is not certain. Although many rating changes are preceded by a non-stable outlook or a CreditWatch placement, changes can and should occur even when the outlook is stable or the rating is not listed but when an abrupt change in the creditworthiness can be assessed immediately.