Formal evaluation of a government body's or company's credit history and ability to repay its debts. An AAA rating is the highest credit rating assigned by Standard & Poor's to a debt obligation. It indicates an extremely strong capacity to pay principal and interest. Bonds rated AA are just a notch below, then single A, then BBB, and so on. (A similar ratings system is available from Moody's Investors Service, with Aaa being the highest rating.) Some ratings show a + or - to further differentiate creditworthiness. Bonds rated 'BBB' and above are considered investment grade, a category to which certain investors, including many pension funds, confine their bond holdings. Bonds rated BB, B, CCC, CC, and C are regarded as speculative. Such bonds are called high-yield or "junk bonds." They offer higher interest rates but greater risk of default. A bond rating of D indicates payment default or the filing of a bankruptcy petition.