Investment grade

(redirected from High Grade Bond)

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 ?
In his newly created position, Wolff will oversee the management and growth of the bank's US dollar high grade bond syndicate.
Investors, however, remain skeptical, keeping $3.3 trillion in money market funds and purchasing more than $400 billion in domestic high grade bond funds during the year.
From "Where next for the global recovery?" (Page 23) Investors remain skeptical keeping -- in money market funds and purchasing more than $400 billion in domestic high grade bond funds during the year.
UBS has an overweight position on Emerging Market sovereign bonds in US dollars relative to high grade bonds, and also on US 10-year Treasuries relative to cash.
Taking advantage of the strong market backdrop for high grade bonds and appetite for ESG investments, EBRD has achieved an impressive mix of green investor diversification and very attractive pricing.
Create a 50:50 portfolio allocation between high grade bonds (e.g.
"Bonds also have a lower risk-based capital requirement, so the NAIC requires less surplus for bonds, particularly high grade bonds."
Currently, UBS is underweight in high grade bonds versus equities as UBS feels that stocks will be supported by still ultra-low yields and high quality bonds will be hurt by upcoming rate rises.