Bond ratings

Definition

Bond ratings are assessments of the credit quality of bonds issued by corporations, municipalities, and sovereign governments. These ratings, assigned by rating agencies, indicate the issuer's ability to repay the bond's principal and interest.

Related terms

Credit Quality: The likelihood that a borrower will default on their financial obligations to creditors.

Default Risk: The risk that an entity will not be able to make required payments on its debt obligations.

Rating Agency: A company that assigns credit ratings for issuers of certain types of debt securities, reflecting their opinion on the issuer's ability and willingness to meet financial obligations