Bonds with a Standard & Poor's rating of BBB or above (Baa or above on Moody's rating service). NAIC considers bonds in classes 1 and 2 as investment grade bonds (classes 3-6 are categorized as non-investment grade bonds).
bond that is assigned a rating in the top four categories by commercial credit rating companies. For example, S&P classifies investment grade bonds as BBB or higher, and Moodys' classifies investment grade bonds as Ba or higher. Related: High-yield bond.
Bonds that have a sufficient credit rating for them to be purchased by most institutional investors.