Credit Impacted By Cyberattacks: On the Rise

Are credit ratings impacted by a company's cyberattack response?

Reports from both 2024 and 2025 are stating "yes." Credit rating agency Moody's Corp. warns that cyber defenses (as well as breach detection, prevention, and response) will be higher priorities in its analysis of the creditworthiness of companies across all sectors, particularly healthcare and financial services.

"Moody's views material cyber threats in a similar vein as other extraordinary event risks, such as a natural disaster, with any subsequent credit impact depending on the duration and severity of the event," according to a new report from Moody's Investors Services. As the threat of cyberattacks continues to rise across all sectors, "the implications could start taking a higher priority in credit analysis," the credit ratings company says.

"We do not explicitly incorporate the risk of cyberattacks into our credit analysis as a principal ratings driver," the report notes. "But across all sectors, our fundamental credit analysis incorporates numerous stress-testing scenarios, and a cyber event, like other event risks, could be the trigger for those stress scenarios. A successful cyber event's severity and duration will be key to determining any credit impact."

Let's dive into the historical link between credit and cyber responses, instances of credit ratings being lowered by cyberattack responses, and what organizations across all industries can do to fortify themselves against potential drops:

Why Are Credit Ratings Impacted By a Company's Cyberattack Response?

Cyberattacks typically haven’t had much impact on credit quality, but the rising number and severity of attacks could change that, says Moody’s Ratings.“The rising number and sophistication of cyberattacks is increasingly eroding creditworthiness,” the rating agency said in a report. “As attack severity intensifies, costs increase, digitalization broadens, and new technologies such as generative AI and quantum computing emerge, the potential for adverse credit effects is rising.”

The fallout from such incidents can reduce firms’ revenues, increase costs, and lead to regulatory and legal sanctions. According to a study of cyber insurance claims, business interruption costs represented 72% of the total cost of cybersecurity incidents on average for organzations with at least US $2 billion in annual revenue

Ransomware payments are the next biggest expense, the Moody's Ratings report goes on to note, although these costs are not typically excessive by design. “Cybercriminals often set their ransom amounts according to the issuers’ revenues and cyber insurance provisions,” the report reads. “The attackers know that organizations are highly unlikely to pay a ransom that would cause significant financial strain, so they use the stolen data to calibrate their ransom demands.”

The other common costs of cyberattacks include reputational damage and intellectual property theft, which Moody’s said “are harder to measure but can also be significant.”

At the same time, the financial impact of attacks can include remediation costs, regulatory fines and legal settlements, the report said: “In the immediate aftermath of an attack, liquidity may become strained and debt may increase as issuers respond to costs incurred as a result of the cyber incident. Later, regulatory fines and legal settlements can weigh on profitability and cash flow.”

Lowered Credit Ratings From Cyber Response: In the News

One of the most recent examples at the time of publication is the City of Hamilton, which received a ‘AA+’ credit rating from S&P Global Ratings.

S&P’s report notes that the change from ‘AAA’ to ‘AA+’ follows delays in completing audited financial statements due to a serious cyberattack in 2024, which temporarily disrupted parts of the City’s data and financial systems. The agency attributed the rating change to reporting timelines, while also recognizing Hamilton’s efforts to modernize and strengthen its systems.

“Hamilton’s finances remain stable, and the AA+ rating– the second highest rating possible– reflects that solid foundation,” said Mayor Andrea Horwath. “While the cyberattack caused a technical reporting delay, it did not weaken our finances. I’ve met with the City Manager to ensure the City is addressing S&P's feedback, while staying focused on strengthening our systems, maintaining transparency, and continuing to make responsible financial decisions that support Hamiltonians and our city’s future.”

Another case study is West Virginia's Princeton Community Hospital. Key details include:

• The attack occurred on March 7th, 2017

• The hackers demanded a ransom of $10 million in Bitcoin

• The hospital was unable to pay the ransom, and was forced to shut down its computer systems

• This caused the hospital to lose revenue, as it was unable to see patients or provide medical services

• The hospital was also downgraded by S&P, as the attack was seen as a sign of financial instability

Conclusion

Preventative cybersecurity measures go beyond protecting against direct losses.

Proactive Red Team and assumed breach assessments, like those offered by Packetlabs, can help validate controls before they're exploited by real adversaries. In an age where adversaries now log in rather than break in, resilience isn’t just about keeping them out; it’s about detecting them quickly and limiting what they can do once they’re in.