Bond Quality Ratings | Definition | What are Bond Quality Ratings?

Bond Quality Ratings

Bond Quality Ratings | Definition

A system of gradation for measuring the relative investment qualities of bonds by the use of rating symbols, which range from the highest investment quality (least investment risk) to the lowest investment quality (greatest investment risk). Two agencies provide the rating systems for companies' credit: Standard & Poor's and Moody's Investor Services.

Standard and Poor's Rating Scale

A1+

Highest grade

A1

High grade

A

Upper medium grade

B1+

Medium grade

B1

Lower medium grade

B

Speculative

C1+ & Cl

Outright speculations

C

Income bonds paying no interest and the best defaulted bonds

D1 & D

In default, with the D symbol assigned to issues that appear to have little recoverable value.


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