Business Glossary

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.

evaluation by rating company of the probability that a particular bond issue will default. Bonds are rated by standard & poor's Moody's Investors Service, Fitch Investor's Service, and Duff & Phelps and are given bond ratings from AAA(least likely to default) to D (default). Bonds rated BBB by Standard & Poor's (Baa by Moody's) or better are rated bank quality bonds or investment grade bonds suitable for purchase by commercial banks, fiduciaries, mutual savings banks, trust companies, and insurance companies. Bonds given lower ratings are considered speculative investments.

method of evaluating the possibility of default by a bond issuer. Standard & Poor's, Moody's Investors Service, and Fitch 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).