Investment grade

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Related to Investment grade: Moody's investment grade

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 ?
The two remaining investment grade credit assessed loans, South Towne Center & Marketplace (3.
The Boykin Portfolio (5%) remains below investment grade.
High profile investment grade companies continue to review strategic and fiscal alternatives.
Over the 15-year period ending in 2005, the average annual default rate across Fitch's investment grade structured bonds was 0.
NEW YORK -- JPMorgan announced today the launch of a new fixed income index designed to provide its clients with a broad measure of the performance of the most liquid securities in the floating rate investment grade corporate bond market.
The CDO securities consist of $818 million of investment grade notes, $35 million of non-investment grade notes, and $165 million of preference shares.

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