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Investment-Grade

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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.
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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.
Bonds 'less attractive' when rates rise by The Journal (Newcastle, England)
The Federal Reserve has announced that it will extend the Term Asset-Backed Securities Loan Facility (TALF) program through March 31, 2010, for "legacy" (existing) commercial mortgage-backed securities (CMBS); and through June 30, 2010, for newly issued investment-grade CMBS.
Federal Reserve extends TALF program by Units
Yields on junk bonds have dropped from more than 20% to under 10% during the past eight months, while investment-grade bonds pay one-third of what they did at the height of the crisis.
END OF THE BOND BOOM? by Ben Levisohn / BusinessWeek
 
 
 
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