The FHR™ Report - Rapid Ratings

Contact Details
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Rating Equivalency Scale
FHR
Range
EPD
(%)*
Temporal
EPD (%)*
Explanation
Rating equivalents
Moody’s⁺ S&P⁺
*The EPDs (estimated probabilities of
default) for each rating notch
represent a seventeen year average
95-100 0.0006 0.005 Minimal Risk of non-payment and insolvency Aaa AAA
(1991-2007) and may be adjusted by
Rapid Ratings customers to reflect
90-94 0.001 0.01 Exceptionally Low Risk Aa1/Aa2 AA+/AA temporal assumptions. The temporal
85-89 0.005 0.04 Very Low Risk Aa3 AAadjustment
shown reflects the
highest year of defaults observed in
80-84 0.01 0.08 Low Risk A1/A2 A+/A our study, 2001.
75-79 0.04 0.31 Moderate to Low Risk and somewhat subject to fluctuations in market conditions A3 A-
70-74 0.08 0.62 Generally Moderate Risk Baa1/Baa2
65-69 0.22 1.69 Moderate Risk / subject to market conditions: investment grade threshold at 65 Baa3 BBB-
60-64 0.42 3.23 Moderate Risk that can worsen with market conditions Ba1 BB+
55-59 0.74 5.70 Medium to Moderate Risk and generally subject to market fluctuations Ba2 BB
50-54 1.26 9.70 Generally Medium Risk Ba3 BB-
45-49 2.04 15.71 Medium Risk / more subject to market conditions B1 B+
40-44 2.94 22.64 Medium Risk that can worsen with market conditions B2 B
35-39 3.96 30.49
Medium to Moderately High Risk and very subject to fluctuations in market
conditions
BBB+/
BBB
B3 B-
30-34 4.88 37.58 Moderately High Risk / Increasingly At Risk Caa1 CCC+
25-29 5.56 42.81 High Risk Caa2 CCC
20-24 5.86 45.12 High Risk of non-payment Caa3 CCC-
15-19 5.90 45.43 High Risk of failure which is unlikely to improve with better market conditions Caa3 CCC-
10-14 5.90 45.43 Very High potential for payment default Ca CC
5-9 5.90 45.43 Still trading but likely under extreme pressure Ca CC
0-4 5.90 45.43 Still trading but possibly insolvent C C
This table shows the equivalents in
the rating levels for the corporate
ratings scale of Rapid Ratings,
Standard and Poor's and Moody's .
While we are confident that there is a
reasonable degree of accuracy across
the rating levels that we have aligned,
the approach is not scientific and it
could be argued that there are other
similar or proximate alignments that
might also be acceptable. The credit
rating equivalents table is not
intended to imply that there is any
correlation between the rating system
and methodology of Rapid Ratings
and the rating systems and
methodologies of Standard & Poor's
or Moody's Investors Services, or that
any other rating agencies would rate
a company at the same level as Rapid
Ratings.
⁺ S&P and Moody's are trademarks of
their respective companies.
While the Rapid Ratings scale appears to be linear, this is not really the case. Owing to the way the statistical distributions underlying the models for each sector have been constructed,
and the sector specific-weights for each variable, companies make non-linear movements over time on Rapid Ratings' scale. The Rapid Ratings’ probability of default (PD) model
originally showed a downward slope in default probabilities for all companies in the last 20 rating points on the bottom of the rating scale (i.e. in the very high risk category). This reveals
that some very weak companies continue to survive while many companies in their cohort have defaulted. To facilitate modeling by clients, Rapid Ratings has capped the PD at the peak
so that client models can fully reflect the underlying risk but avoid getting caught up in the reality of weak survivors.
Disclaimer: A Financial Health Rating (FHR) or equity recommendation from Rapid Ratings is not a recommendation or opinion that is intended to substitute for a financial advisor's or
investor's independent assessment of whether to buy, sell or hold any financial products. The FHR is a statement of opinion derived objectively through our software from public
information about the relevant entity. This information and the related FHR’s and related analysis provided in the reports by Rapid Ratings do not represent an offer to trade in
securities. The research information contained therein is an objective and independent reference source, which should be used in conjunction with other information in forming the basis
for an investment decision. Rapid Ratings believes that all of its reports are based on reliable data and information, but Rapid Ratings has not verified this or obtained an independent
verification to this effect. Rapid Ratings provides no guarantee with respect to the accuracy or completeness of the data relied upon, nor the conclusions derived from the data. Each
FHR is a relative, probabilistic assessment of the credit risk of the relevant entity and its potential to meet financial obligations. It is not a statement that default will or will not occur
given that circumstances change and management can adopt new strategies. Reports have been prepared at the request of, and for the purpose of, the subscribers to our service only,
and neither Rapid Ratings nor any of our employees accept any responsibility on any ground whatsoever, including liability in negligence, to any other person. Finally, Rapid Ratings
and its employees accept no liability whatsoever for any direct, indirect or consequential loss of any kind arising from the use of its ratings and rating research in any way whatsoever,
unless Rapid Ratings is negligent in misinterpreting or manipulating the data, in which case, our maximum liability to our client is the amount of our fee for the report.
Industry: The Rapid Ratings Industry Classification for this company is IND_604.
Data Source: Bloomberg
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FHR Report
Research In Motion Ltd, December 22, 2011
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