Investment grade

(redirected from Investment-Grade Debt)

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 pharmacy giant plans to issue $40 billion of the investment-grade debt in a nine-part offering, people with knowledge of the matter said.
While equity valuations can reside far from their means for extended periods, bond valuations expressed in current yields are more predictive of near-term returns for investment-grade debt, a key component of the typical core portfolio.
He represents a range of corporate and financial institution clients on a wide variety of public and private securities offerings by issuers in various industries, including initial public offerings, high-yield and investment-grade debt financings and equity-linked offerings.
Probert is currently the head of the bank's Americas investment-grade debt capital markets.
The government is seen taking advantage of low borrowing costs due to falling US Treasury rates and healthy investor appetite for Gulf investment-grade debt.
7 percent this month including reinvested interest, outperforming investment-grade debt which returned 1 percent.
Moreover, high-yield debt has outperformed investment-grade debt, and tighter monetary policy does not seem an immediate prospect, which should help the asset class.
The central bank will now accept equities in the Primary Dealer Credit Facility, its program for lending money directly to brokerages, in addition to investment-grade debt.
Wachovia's Real Estate Corporate Finance team, led by Lawrence Gray, continued as a market leader in several investment banking categories in 2003, including lead-managed REIT common and preferred equity offerings, and REIT investment-grade debt.
Rather than a single buyer, Kohn said, the purchase was split; the senior, investment-grade debt was assumed by Greenwich (Conn.
The investment ratings services have four categories of investment-grade debt ratings, ranging from exceptional to adequate.
Serving primarily middle-tier institutional investors with $1 billion to $5 billion under management, Blaylock on its own can underwrite up to a $1 billion offering in investment-grade debt.