A simple definition of Notching is: It is the practice of rating agencies to assign different ratings to certain liabilities or loans of the issuing or closely related company. The difference in ratings between bonds is based on the difference in the preference of the bond or the loan. Bonds are subject to high or low positions with losses at various levels in case of default. Therefore, although Company A may have an overall credit rating of AA, its Junior Debt may have an A rating.
- Signs appear when rating agencies increase or decrease the credit quality of certain loans or obligations issued.
- Because certain types of loans, such as subordinate loans, are more risky than older loans, the classification of bad debts can be downgraded.
- Similarly, the senior loan obtained by the issuer through suicide can be maximized.
Meanings of Notching
Make a mark.
Mark or Arrive (some)
Creek or edge or cut to the surface.
A deep, narrow valley
Sentences of Notching
Cut the stick at each end
Accumulated fifteen years of service in the company
At the end of the arrow is a mark for the rope.
Synonyms of Notching
■■■■, crater, dip, narrow road, gap, indent, secure, incise, concavity, mark , score , score, hollow, mark, slot, earn, depression, scratch , col, ■■■■ , achieve, furrow, defile, rack up, chalk up, canyon, record, way