Online Test Banks
Score higher
See Online Test Banks
eLearning
Learning anything is easy
Browse Online Courses
Mobile Apps
Learning on the go
Explore Mobile Apps
Dummies Store
Shop for books and more
Start Shopping

How to Read Bond Ratings

Part of the Bond Investing For Dummies Cheat Sheet

Before you buy a bond, get an idea of how much financial muscle the issuer has. Bond ratings are available through any brokerage house. Three of the most popular rating services are Moody’s, Standard & Poor’s, and Fitch. The following table shows the system each uses to rate bonds:

Bond Credit Quality Ratings
Credit risk ratings Moody’s Standard & Poor’s Fitch
Investment grade
Tip-top quality Aaa AAA AAA
Premium quality Aa AA AA
Near-premium quality A A A
Take-home-to-Mom quality Baa BBB BBB
Not investment grade
Borderline ugly Ba BB BB
Ugly B B B
Definitely don’t-take-home-to-Mom quality Caa CCC CCC
You’ll be extremely lucky to get your money back Ca CC CC
Interest payments have halted or bankruptcy is in process C D C
Already in default C D D

Bond ratings are available through any brokerage house.

blog comments powered by Disqus

SERIES
Bond Investing For Dummies Cheat Sheet

Advertisement

Inside Dummies.com

Dummies.com Sweepstakes

Win $500. Easy.