Bond rating

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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

A measure of the likelihood of a bond's default. Credit ratings agencies conduct credit analysis in order to provide bond ratings; the criteria and the ratings themselves may change these from time to time. Bond ratings are important to bond investors as they make investment decisions. For example, if a bond has a low rating and an investor is risk averse, he/she will be unlikely to invest in that bond, as it will lead to an increased possibility that the investor will lose the amount invested. See also: Investment-grade, Junk.

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's—use 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.

References in periodicals archive ?
BOND CREDIT ratings business Moody's upgraded Cyprus' government bond rating to B3 from Caa3 and has also changed the outlook on the government bond rating to stable from positive and affirmed Cyprus' Not-Prime (NP) short-term rating.
Moody's bond credit rating for Egypt since the 25 January Revolution in 2011:
Economic growth, combined with increasing confidence and the ongoing real estate market recovery, will support credit growth of seven to 10 per cent in 2014, said Moody's, the bond credit rating business of Moody's Corporation.
These include reducing transaction costs and settlement time on the Egyptian Exchange; and developing the bond market through facilitating bond issuance procedures and establishing bond credit rating agencies, among other measures.