Investment grade

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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 ?
These product offerings add to the INTL FCStone Inc.'s already robust debt instruments, including Treasuries, Agencies, MBS, ABS, and Municipal and Investment Grade bonds.
Global automotive and industrial supplier, Schaeffler, has said that it is planning to issue investment grade bonds on the basis of its full year figures for 2018 and depending on market conditions.
In this light and in lieu of the low interest rate environment mentioned above, high yield bonds have been attractive to investors over the last several years, owing to their payout of more income (i.e., a higher rate of interest) than other, more highly rated and safer investment grade bonds. Generally speaking, however, the higher the rate of interest and the lower the credit rating on any given bond, the greater the risk of default.
The construction of each RBC Fixed Income Pool starts with investments in Canadian investment grade bonds. Allocations to global government, corporate, high yield and emerging market bonds are then added to enhance yield and diversify risk.
Allocations to Developed Government and Investment Grade Bonds, Cash and Short-Maturity Bonds, and Alternative Trading Strategies remained tactically underweight in the latest Compass report.
investment grade bonds and the risk-free rate is 115 basis points (1.15 percent of additional yield) as of June 14, which is relatively tight by historical measures although not as tight as they were at the end of 2017.
Allocations to Investment Grade Bonds , Cash and Short-Maturity Bonds , Developed Government Bonds and Alternative Trading Strategies remained tactically underweight in the latest Compass report.
With those price declines, investment grade bonds returned minus 2.6 percent in the first two months of the year, making for the worst start for the asset class since 1981.
A benchmark of global stocks rose almost 22 per cent during the year, registering its strongest gain since 2009's rebound-from-recession, while global investment grade bonds rose more than 7 per cent, marking their biggest yearly rise since 2007.
The overwhelming majority of insurance company assets are invested in investment grade bonds. Reasons for that include forecastable cash flows, low default risk and favorable capital treatment.
"For over 30 years, investment grade bonds have produced a tail wind for investment portfolios.
Hong Kong, Sept 25, 2013 - (ACN Newswire) - China ZhengTong Auto Services Holdings Limited ("ZhengTong Auto" or the "Company", together with its subsidiaries, the "Group", stock code: 1728), a leading luxury brands 4S dealership group in China, reported that Moody's Investors Service has confirmed the Group's Ba3 corporate family rating and stable credit metrics outlook following the Company's successful issuance of US$ 335 million investment grade bonds.

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