Bond rating

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Bond rating

A rating based on the possibility of default by a bond issuer. The ratings range from AAA (highly unlikely to default) to D (in default). See: Rating, investment grade.

Bond Rating

A measure of the likelihood of a bond's default. Credit ratings agencies conduct credit analysis in order to provide bond ratings; the criteria and the ratings themselves may change these from time to time. Bond ratings are important to bond investors as they make investment decisions. For example, if a bond has a low rating and an investor is risk averse, he/she will be unlikely to invest in that bond, as it will lead to an increased possibility that the investor will lose the amount invested. See also: Investment-grade, Junk.

bond rating

The grading of a debt security with respect to the issuer's ability to meet interest and principal requirements in a timely manner. The three major rating services—Fitch, Moody's, and Standard & Poor's—use AAA as their highest rating and grade down through Bs and Cs. (D is used only by Fitch.) Debts rated AAA, AA, A, and BBB are considered investment-grade. Higher rated bonds provide lower returns, the price an investor pays for greater safety. Compare stock rating. See also interest coverage.

Bond rating.

Independent agencies, such as Standard & Poor's (S&P) and Moody's Investors Service, assess the likelihood that bond issuers are likely to default on their loans or interest payments.

Ratings systems differ from one agency to another but usually have at least 10 categories, ranging from a high of AAA (or Aaa) to a low of D. Bonds ranked BBB (or Baa) or higher are considered investment-grade bonds.

References in periodicals archive ?
1 million in general obligation municipal bonds, Standard & Poor's bumped up Worcester's bond rating by two grades, from A- to A+ while Moody's Investors Service upgraded its rating from A1 to Aa3.
While we believe that both of these studies contribute to the accounting literature, we also believe that the use of only one bond rating source represents a limitation in both studies because the use of only one bond rating source masks the potential influence, if any, of split ratings on the results of these studies.
While the risk of a government default is very low, as reflected in its A2 bond rating, the resiliency of private sector ratings, especially those higher than the government, to the stress associated with government financial difficulties must be thoroughly assessed.
I personally don't appreciate any department putting a gun to the council's head and saying, 'We're out of time and we're coming up against a bond rating.
As a result, he added, that has changed how bond rating agencies assess communities.
The Moody's firm reported to the board at Wednesday's meeting via telephone that the bond rating was lowered from an AAA level to Baa1, affecting $67 million of outstanding debt.
Just past the anniversary of our first CMBS rating, our agency has made its mark not only in the CMBS sector, but across the board," said Jules Kroll, Chairman and CEO of Kroll Bond Rating Agency.
Twenty-three Massachusetts cities and towns currently have the highest possible bond rating - AAA - from at least one of the three major rating agencies, according to the Massachusetts Municipal Association.
At the same time, Fitch Ratings issued a less pessimistic outlook, affirming its previous bond rating for the city.
Should the state's bond rating get downgraded again, the interest rates on future bond issues will go through the roof.
Last week, Fitch Ratings had downgraded the future outlook of the city - a prediction of how the bond rating might change - from ``stable'' to ``negative'' because of the uncertainty connected with secession.
Given the loan pool's current credit quality, structural default tolerance levels exceed Fitch's 'AAA' SRF bond rating guidelines by a 4.