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What is the definition of Bond Rating?

WE ANSWER:

The Bond Rating provides an evaluation of the financial strength and credit quality of a bond that is being offered in the securities market. Most of these are conducted by major rating agencies such as Moody's Investors Service, Fitch Ratings and Standard & Poor's.

The Bond Rating provides a grade - the lowest being "C" or junk bonds, and the highest being "AAA".

The grades (in Standard & Poor's format) are as follows:

D - Bonds that are in default because of non-payment of the interest and sometimes even the principal.

C, CC, CCC, B, CC - Bonds that have low credit quality

BBB, A - Bonds with medium credit-quality investment grade

AA, AAA - Bonds with high credit-quality investment grade

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