A situation in which a bond is speculative grade but very close to investment grade or vice versa. It often refers to a split rating in which one credit rating agency gives the bond an investment grade rating and another gives it a junk rating. Generally speaking, regulators require bonds to receive investment grade ratings from two different agencies. Thus, crossover credit is often not strong enough to allow banks to invest in them.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Of or relating to a bond that straddles the gap between investment-grade and speculative. Crossover credits are generally rated low investment-grade by one rating agency and upper-grade speculative by another rating agency. See also split rating.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.