Considered among the highest quality bonds based on safety of principal and dependability of interest payments. Investment grade bonds are generally divided into four rating categories, lead by bonds issued by the most stable governments and the largest, most financially-secure corporations.
A bond rated AAA by Standard & Poor's or Aaa by Moody's considered of high quality having little risk.
These are generally regarded as high quality bonds. There are two main bond rating agencies, Standard & Poor's and Moody's. Their investment grade rating will range from, AAA/Aaa to BBB/Bbb.
Corporate bond with a credit rating of BB or above from Standard & Poor's, or Ba and above from Moody's.
A bond with one of the top four credit ratings (AAA, AA, A, BBB) of independent bond-rating agencies, like Moody's or Standard & Poor's.
A bond that is rated BBB or higher by a credit agency.
Companies whose bonds are rated as 'investment grade' have a lower chance of defaulting on their debt than those rated as 'non investment grade'. Generally, these bonds are issued by long-established companies with strong balance sheets. Bonds rated BBB or above are known as 'investment grade bonds'.
An investment grade bond is a bond that is assigned to one of the top four creditworthiness categories by credit rating agencies. For example, Standard & Poor's investment grade classifications are AAA, AA, A or BBB and Moody's are Aaa, Aa, A or Baa. Bond issuers with an investment grade designation have only a slight risk of default. See: Junk Bond