Identification

• Fitch Ratings uses an F-series list of rating steps to give credit ratings for short term debt commitments. An F-1 rating indicates the top level of safety for payment of short term debts. If a bank has an F-1 rating, Fitch considers the bank to have the strongest ability to pay its short term financial obligations.
  
  

Function

• The Fitch short term rating system uses the following ratings: F-1, F-2, F-3, B, C, RD and D. RD and D are indications that a company is in default. B and C are speculative grades. Fitch defines speculative companies as those that may not have the ability to meet their financial commitments. The different F grades provide various levels of short term, non-speculative credit quality. These companies have the capacity to meet their commitments, with F-1 being stronger than F-2 and so on. The Fitch Ratings website notes that a plus and minus sign can be used with any of the ratings to provide further differentiation among the credit grades.
  
  

Significance

• A bank with an F-1 rating has been given the second highest rating for short term credit safety. For commercial enterprises, Fitch states that the short term ratings are for obligations with maturities up to 13 months. The only possible short term rating higher than an F-1 rating is a rating of F-1+.
  
  

Considerations

• Fitch Ratings provides a table to show the relationship between short and long term ratings. According to Fitch, an F-1 rating corresponds with the long term ratings of A-, A and A+. If a bank has the plus added and has a short term F-1+ rating, the equivalent long term ratings are A+, AA-, AA, AA+ and AAA. The absolute highest short term credit rating a bank could have is an F-1+. The F-1 rating is a step below but still a strong, non-speculative grade.
  
  

Warning

• Fitch Ratings makes a special effort to let investors know the limitations of the short term rating system. The ratings are not predictive of specific default rates or investment returns. The ratings do not make any judgment other than Fitch's opinion of the chances of default by the bank or other rated entity.