investment-grade

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

Of, relating to, or being a bond suitable for purchase by institutions under the prudent man rule. Investment-grade is restricted to those bonds graded BBB and above by Standard & Poor's and graded Baa3 and above by Moody's. Also called bank-grade. Compare high-grade.
References in periodicals archive ?
Standard & Poor's Ratings Services has lifted Ford's credit rating to investment-grade status on healthy sales in North America.
For this reason, most bond deals are given below investment-grade ratings or are left non-rated.
Indeed, after 1981 the use of call options by investment-grade firms decreases dramatically (see Crabbe (1991)), effectively nullifying the attempts of theorists in earlier decades to explain why nearly all bonds are callable.
For investment-grade nonfinancial corporations, medium-term notes became a growing source of funds.
NEW YORK -- The role of covenants in indentures has become increasingly significant to bondholders, and particularly to investment-grade bondholders, as some of those issuers could be likely buyout targets and where the risk of credit deterioration may be substantial, as discussed in Fitch's report.
Over 90% of the combined pool participants are of investment-grade quality as exhibited by public investment-grade ratings from one of the nationally recognized rating agencies.
NEW YORK -- Due mostly to lackluster rating performance at the investment-grade level, at the end of September, the U.
Almost $3 billion of San Francisco investment-grade properties have recently changed hands.
Of the four investment-grade credit assessed loans in the pool at issuance, one loan paid in full in July 2004 and two (22%) remain investment-grade.
Approximately 90% of the combined pool participants are of investment-grade quality as exhibited by public investment-grade ratings from one of the nationally recognized rating agencies.
As a result, an investment-grade security supported by an eligible liquidity facility may, in fact, pose more risk than the risk commensurate with its rating because the potential loss to CP investors would occur when the security migrates to a non-investment grade rating and prior to the security's default.
In contrast, the investment-grade component of the U.