Investment grade


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Related to Investment grade: Moody's investment grade

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 ?
While there have been periods of market stress, most recently in 2012 when borrowing became more difficult for issuers in the periphery, while investment grade corporates in EMEA (including those in the periphery) have been able to access financing.
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I studied these exchange relations across two of the primary securities markets, one for investment grade debt and one for non-investment-grade debt, during the period 1981 to 1987.
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Cypriot bond yields fell sharply on Monday after Standard and Poor's rating agency upgraded the island's sovereign bond to investment grade, more than six years after it had been downgraded into 'junk' territory.
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