Investment grade

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Investment grade

In the context of bond ratings, the rating level above which institutional investors have been authorized to invest.

Investment Grade

Describing a bond with a medium or high rating. Bonds rated Baa3 by Moody's or BBB- by S&P or Fitch. Investment-grade bonds are considered sufficiently low-risk that the law allows banks to invest in them. In addition to being low-risk, investment-grade bonds are low-return, greatly reducing the cost on the issuer. Most American Treasury and municipal bonds are investment-grade. See also: Junk, High-Rating.

Investment grade.

When a bond is rated investment grade, its issuer is considered able to meet its obligations, exposing bondholders to minimal default risk.

Most US corporate and municipal bonds are rated by independent services such as Moody's Investors Service and Standard & Poor's (S&P).

The ratings are based on a number of criteria, including the likelihood that the bond issuer will be able to make interest payments and repay the principal in full and on time.

The four categories of bonds rated BBB and higher by S&P or Baa and higher by Moody's are considered investment grade.

References in periodicals archive ?
Patrick Vogel, lead manager on Schroder ISF EURO Credit Conviction and Head of European Credit, added:"As the eurozone economies move into a stabilisation phase, providing a more supportive environment for credit, we are seeing a sweet-spot for European credit with opportunities across the investment space, particularly in higher yielding investment grade bonds.
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com/, and find out how to assess the investment potential of both investment grade bonds, and "junk" bonds.
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By buying primarily the top three classes of investment grade bonds (AAA, AA, A ratings) Johns has helped protect his fund from this year's rising interest rates.
The Fund's investment objective is to provide current income and capital appreciation by investing primarily in a diversified portfolio of investment grade bonds.
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The $10 billion portfolio consists of 100 investment grade bonds (97 corporate bonds and 3 sovereigns).
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The increased liquidity percentage contrasted with bonds, Dorchester said, with the percentage of investors' assets invested in investment grade bonds totaling 31.
The Bank also received number one international rankings in structured finance issues, high yield bonds, investment grade bonds (excluding medium term takedowns), and emerging market issues.

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