AAA-Rated Companies: Where’d They Go?

In the early 1990s, American investors could choose from over sixty publicly available investments in companies whose debt issuances were rated as AAA, the highest possible credit rating which denotes the lowest rate of foreseeable default that exists in the world of debt instruments.

3M, Amoco (now BP), ADP, Campbell Soup, Chevron, DuPont, Exxon, General Electric, Getty Oil, IBM, Kellogg, Kraft, Procter & Gamble, Pfizer, Merck, and Ford all had AAA-rated debt. In 2019, the only companies left in the United States with AAA-rated debt were Johnson & Johnson and Microsoft (Johnson & Johnson and Microsoft sit on $19 billion and $127 billion in cash, respectively).

When Moody’s, Fitch, and Standard & Poor’s rate the debt of a company, they look at the following factors:

  1. Earnings growth;
  2. Profit margins;
  3. Revenue growth;
  4. Future industry outlook;
  5. Tax burden;
  6. Pension obligations;
  7. Regulatory climate;
  8. Intellectual property, including trademarks and copyrights;
  9. Distribution channels;
  10. Economies of
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