Baa2

Baa2 is a credit rating assigned by Moody's Investors Service. It belongs to the Baa category, which is within Moody's investment-grade ratings. Baa2 indicates investment-grade credit quality with moderate credit risk and sits in the middle of the Baa range, being one notch above Baa3 and one notch below Baa1.

Meaning and implications: The issuer or obligation has adequate capacity to meet financial commitments under current conditions, but remains susceptible to adverse changes in economic or business environments and to rising leverage or liquidity pressures. A downgrade could occur if conditions deteriorate; an upgrade could follow improvements in financial strength or cash flow.

Context within the rating system: Moody's uses a combination of letter grades and numerical modifiers (1, 2, 3). The Baa category is generally considered investment-grade, though risk increases from Baa1 to Baa3. Within the investment-grade band, Baa2 is viewed as lower-medium grade relative to Baa1 and higher-quality than Baa3.

Impact on funding and markets: For issuers, a Baa2 rating typically supports access to broad debt markets with relatively moderate funding costs compared with non-investment-grade borrowers, though higher than the top investment-grade tier. For investors, Baa2 represents a balance of yield and risk consistent with lower-medium-grade credit risk. Ratings can influence eligibility for certain investment mandates and collateral requirements in some markets.

Surveillance: Moody's continuously monitors rated entities, and ratings may be revised up or down as new information becomes available, with potential outlooks or watch statuses added during the process.