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 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'suse 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.
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