Bond Ratings
Investment Grade Bond Ratings
Moody’s | Standard & Poor’s | Comments | Default Rate* | Safety Record |
Aaa | AAA | Highest quality, very little risk. | 0.00% | 100% |
Aa | AA | Very high quality. The ratings in this category include: (Moody Aa1, Aa2, Aa3) (S&P AA+, AA, AA-) | 0.00% | 100% |
A | A | Good quality with a strong capacity to meet debt service requirements. The ratings in this category include: | 0.03% | 99.97% |
Baa | BBB | Adequate quality, needs to be monitored, lowest investment grade ratings, may not be appropriate for many portfolios. | 0.50% | 99.50% |
Non-Investment Grade Bond Ratings**
Moody’s | Standard & Poor’s | Comments | Default Rate* | Safety Record |
Ba | BB | Judged to have speculative elements. The protection of interest and principal payments may be very moderate. | 1.66% | 98.34% |
B | B | Speculative; currently have the capacity to meet debt service | 9.18% | 90.82% |
Caa | CCC | Very speculative; vulnerable to default “Buyer Beware.” Any adverse business, financial, or economic condition could result in a default. | NA | NA |
Ca | CC | Junk rating; widely speculative, may be headed for default. | NA | NA |
C | C | Default, bankruptcy, or reorganization seems inevitable. | NA | NA |
D** | Bonds in default; interest or principal payments have not been made on the date due. | NA | NA |
*As per Moody’s, default rate based on the following four-year period after the Moody’s rating was assigned.
** Bonds rated as non-investment grade are not suitable for all investors. Careful consideration should be given to individual investment objectives prior to any transaction in non-investment grade securities.