Bond Ratings - Fidelity (2024)

FAQs

Where do I find bond ratings? ›

In S&P Global Ratings long-term rating scale, issuers and debt issues that receive a rating of 'BBB-' or above are generally considered by regulators and market participants to be “investment-grade,” while those that receive a rating lower than 'BBB-' are generally considered to be “speculative-grade.”

Bonds with a rating of BBB- (on the Standard & Poor's and Fitch scale) or Baa3 (on Moody's) or better are considered "investment-grade." Bonds with lower ratings are considered "speculative" and often referred to as "high-yield" or "junk" bonds.

'BBB' National Ratings denote a moderate level of default risk relative to other issuers or obligations in the same country or monetary union. 'BB' National Ratings denote an elevated default risk relative to other issuers or obligations in the same country or monetary union.

The three primary bond rating agencies in the U.S. are Standard & Poor's Global Ratings, Moody's, and Fitch Ratings. Each uses a unique letter-based rating system to quickly convey to investors whether a bond carries a low or high default risk and whether the issuer is financially stable.

Higher-rated bonds, investment-grade bonds, are safer and more stable investments tied to corporations or government entities. Investment-grade bonds contain “AAA” to “BBB-“ ratings. 1 Bond yields increase as ratings decrease. Most common "AAA" bond securities have been historically found in U.S. Treasury Bonds.

Bonds with triple-A ratings are considered the safest investments available. As you scan down the chart, credit quality decreases and risk increases. Debt rated below BBB- will pay a higher rate of interest to the bondholder but will also come with a much greater risk of default.

Understanding Insurance Company Credit Ratings

2 It is important not to confuse, for example, A.M. Best's second-best rating of A+ (for superior) with Fitch's fifth-best rating of A+ (for strong), or A.M. Best's C rating (for weak) with Moody's C (for lowest rated).

The highest possible rating that a bond may achieve is AAA, which is only bestowed upon those bonds that exhibit the highest levels of creditworthiness. This AAA rating is used by Fitch Ratings and Standard & Poor's, while Moody's uses a similar Aaa lettering.

Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. Obligations rated B are considered speculative and are subject to high credit risk.

Are AA rated bonds safe? ›

S&P ratings are issued to long-term issuers of credit and insurance companies on a letter-based scale. The first rating is AAA, while the second highest is AA. Anything that falls in the A class is considered high quality, and the debt issuer has a strong likelihood of meeting its financial obligations.

Key Takeaways. A bond rating is a letter-based credit scoring scheme used to judge the quality and creditworthiness of a bond. Investment grade bonds are assigned “AAA” to “BBB-" ratings from Standard & Poor's and Fitch, and "Aaa" to "Baa3" ratings from Moody's. Junk bonds have lower ratings.

BB+ credit rating is a notch above BB, which is a slightly lower credit risk, and BB- credit rating is a notch below BB, and a slightly higher credit risk. Note that BB+, BB and BB- are credit ratings specific to Standard & Poor and Fitch credit agencies.

BBB Business Profiles generally explain the most significant factors that raise or lower a business's rating. BBB ratings are not a guarantee of a business's reliability or performance. BBB recommends that consumers consider a business's BBB rating in addition to all other available information about the business.

An F rating is your BBB's lowest grade. Typically, businesses with F ratings have unanswered and/or unresolved complaints or a pattern of complaints that reflects failure by the businesses to deal with the causes of customer problems.

To obtain your company credit report, you'll need to: Step 1: The first step in generating the report is to go to the CRIF's business credit report page. Fill in the basic details such as full name, mobile number, and business email ID.

In general, higher-risk bonds need to offer higher interest rates to appear worthwhile to investors. There are three main bond rating agencies in the United States that account for approximately 95% of all bond ratings: Fitch Ratings, Standard & Poor's Global Ratings (S&P Global Ratings) and Moody's Investors Service.

In most cases, if you have a brokerage account, you will have access to that firm's research tools, which may include bond quotes and other information. This is the first place that you should look when seeking bond information.

Moody's assigns bond credit ratings of Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C, as well as WR and NR for 'withdrawn' and 'not rated' respectively. Standard & Poor's and Fitch assign bond credit ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, D.