investment-grade

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

Of, relating to, or being a bond suitable for purchase by institutions under the prudent man rule. Investment-grade is restricted to those bonds graded BBB and above by Standard & Poor's and graded Baa3 and above by Moody's. Also called bank-grade. Compare high-grade.
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Standard & Poor's Ratings Services has lifted Ford's credit rating to investment-grade status on healthy sales in North America.
United States : FORD gets investment-grade status by S&P
For this reason, most bond deals are given below investment-grade ratings or are left non-rated.
To bond raters, cash is king
Indeed, after 1981 the use of call options by investment-grade firms decreases dramatically (see Crabbe (1991)), effectively nullifying the attempts of theorists in earlier decades to explain why nearly all bonds are callable.
Alternative tests of agency theories of callable corporate bonds
For investment-grade nonfinancial corporations, medium-term notes became a growing source of funds.
Recent developments in corporate finance

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