A credit rating agency is a company that assesses the financial strength of companies and government entities, especially their ability to meet principal and interest payments on their debts. The rating assigned to a given debt shows an agency's level of confidence that the borrower will honor its debt obligations as agreed.
In 2008 Moody’s Rating Agency had given AAA rating to Lehman brothers, which is the top rating, but soon after, Lehman brothers collapsed and filed for bankruptcy in 2008.
Brickwork Ratings based in India gave favourable ratings to debt instruments of IL&FS group. Right after, IL&FS Financial Services fell short of cash and defaulted on several of its obligations.