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Business Definition for: AAA
Dictionary of Banking Terms
AAA

highest rated corporate or municipal bond, with full payment of principal and interest expected at maturity. Bonds rated AAA, AA, A, and BBB by Standard & Poor's, and Baa or better by Moody's Investors Service, are considered investment grade bonds, eligible for purchase by banks and savings institutions as investment securities .

See also bond rating
Related Terms:
bond rating

method of evaluating the possibility of default by a bond issuer. Fitch Ratings, Standard & Poor's, and Moody's Investors Service analyze the financial strength of each bond's issuer, whether a corporation or a government body. Their ratings range from AAA (highly unlikely to default) to D (in default). Bonds rated BB or below are not investment grade-in other words, institutions that invest other people's money may not under most state laws buy them.

Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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