Investment grade

(redirected from Investment-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 ?
investment-grade bond sales in July, they're getting pickier.
com), an internet-based Dutch auction platform for the investment-grade bond market.
In September the firm broke new ground as sole lead manager in a 10-year $300 million investment-grade bond issue by Coca-Cola Enterprises Inc.
7 billion, consisting of 25 structured products including nine CLOs, one structured loan fund, 10 ABS CDOs, and five investment-grade bond CDOs.
AST's launch consists of 10 ETF collective funds, including large-cap, mid-cap, small-cap, emerging markets, international, equity, short-term and investment-grade bond funds choices.
Misenheimer, 42, brings 15 years of high-yield and investment-grade bond investment management experience to Seligman.
The investment-grade bonds were offered to allow the firm to restructure debt and bolster its capital for future growth.
What I expect we'll see is more of a carrier shift to lower-rated investment-grade bonds and a slight increase in stocks and junk bonds.
It's also worth remembering that high-yield bonds tend to be of shorter duration (or shorter weighted-average maturity) than investment-grade bonds, and this means that they should not suffer too much when interest rates do begin to rise from what are very low levels.
Call options on corporate bonds are now mostly observed on speculative-grade bonds and on long-term investment-grade bonds (e.
The Core Plus Bond fund will invest at least 65 percent of its assets in investment-grade bonds and also have the ability to invest up to 35 percent of its assets in high-yield and emerging market debt.
Top-quality bonds are referred to as investment-grade bonds.