Investment-grade bonds

Investment-grade bonds

A bond that is assigned a rating in the top four categories by commercial credit rating companies. S&P classifies investment-grade bonds as BBB or higher, and Moody's classifies investment grade bonds as BAA or higher. Related: High-yield bond.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
By contrast, lower-yielding investment-grade bonds in those same markets are on track for their longest stretch of monthly gains on record.
The managers predominantly invest in investment-grade bonds using an approach that considers economic and political trends, company analysis and thematic ideas.
A diversified, closed-end management investment company, WEA seeks current income and capital appreciation by investing in a diversified portfolio of investment-grade bonds.
Fitch expects asset quality to remain relatively stable in 2019 with exposure to below investment-grade bonds below historic averages.
Investment-grade bonds: Corporate bonds are vulnerable to rising rates, though many large companies locked in long-term borrowing at low interest rates.
Less than two months later, Dell's banks went out to sell what was originally going to be $16 billion worth of investment-grade bonds. But investor demand for the debt proved significantly higher than anticipated, prompting Dell and the banks to increase the order size to $20 billion, the second-largest investment-grade bond offering this year after a $45.8 billion deal for Anheuser-Busch, according to Thomson Reuters.
Vanguard Core Bond Fund is similar to Vanguard Total Bond Market Index Fund, providing low-cost exposure to investment-grade bonds and broad diversification with an intermediate-term average maturity.
Dollar-denominated investment-grade bonds have been steadily losing value.
Moody's held Russia's overall rating at B1, in the low range for investment-grade bonds. But it warned that the spread of the Ukraine conflict from Crimea to the country's eastern border with Russia has raised the dangers of "geo-political event risk" for Moscow, including from western sanctions.
interest rates inevitably start to climb-as economic growth gains a steeper trajectory and the Federal Reserve begins its long-awaited tapering of quantitative easing-high-yield portfolios will fulfill their promise of returns superior to investment-grade bonds.
On the other hand, while high-yield corporate bonds tend to be less sensitive to interest rates than investment-grade bonds, investors should not conclude they are immune from interest rate risk.