Moody's to introduce new scale for probability-of-default ratings

By Marisa Wong

Madison, Wis., Jan. 7 - Moody's Investors Service said it expects to introduce in mid-January a new rating scale for probability-of-default ratings.

Currently, probability-of-default ratings are expressed using the same 21-point rating scale used for long-term corporate obligations, Aaa through C, plus a D rating for defaulters. Additionally, an /LD indicator is appended to indicate a partial or limited default.

The new scale for probability-of-default ratings will equal the current global long-term scale plus a D rating for defaulters with -PD appended at all rating levels.

The rating agency plans to add the -PD to all existing and any new probability-of-default ratings.

Moody's noted that the upcoming change will not alter the meaning of probability-of-default ratings.

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