Broker Check

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:
(Moody’s A1, A2, A3) (S&P A+, A, A-)

0.03%

99.97%

Baa

BBB

Adequate quality, needs to be monitored, lowest investment grade ratings, may not be appropriate for many portfolios.
(Moody’s Baa1, Baa2, Baa3) (S&P BBB+, BBB, BBB-)

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
payments but lack characteristics of a quality investment.

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.