Investment grade

(redirected from Investment-Grade Debt)

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 ?
The option-adjusted spread on the Bloomberg Barclays index of investment-grade debt in emerging markets - a measure of yield above U.S.
Peabody will be focused on managing investment-grade debt securities in the fund, working with current portfolio managers Robert Persons and Andy Li.
The pharmacy giant plans to issue $40 billion of the investment-grade debt in a nine-part offering, people with knowledge of the matter said.
While equity valuations can reside far from their means for extended periods, bond valuations expressed in current yields are more predictive of near-term returns for investment-grade debt, a key component of the typical core portfolio.
Sempra Energy expects to fund the USD 9.45bn transaction using a combination of its own debt and equity, third-party equity, and USD 3bn of expected investment-grade debt at the reorganised holding company.
Primarily focusing on capital markets, she represents issuers and underwriters in public and private offerings of equity securities, high-yield debt securities and investment-grade debt securities.
He represents a range of corporate and financial institution clients on a wide variety of public and private securities offerings by issuers in various industries, including initial public offerings, high-yield and investment-grade debt financings and equity-linked offerings.
"The premium we see associated with Chinese companies is absent in this case," Dorian Garay, a New York-based money manager for the global investment-grade debt fund at ING Investment Management, said in a telephone interview.
The government is seen taking advantage of low borrowing costs due to falling US Treasury rates and healthy investor appetite for Gulf investment-grade debt.
However, these risks are moderated by the Bank's healthy liquidity profile and large holdings of investment-grade debt securities.
As for yield spreads, the spread for investment-grade debt over U.S.
Ratings agency Standard & Poor's warned this month that India could be the first of the BRICS emerging economies -- which also includes Brazil, Russia, China and South Africa -- to lose its investment-grade debt classification unless it revived growth and rekindled its reform programme.