A letter grade for how likely the issuer is to miss payments
A credit rating is a grade such as AAA or BB that a rating agency assigns to how likely an issuer is to miss payments. A higher grade means lower assumed risk and therefore a lower yield. BBB and above is called investment grade; below that is speculative. Ratings are revised over time, and a downgrade tends to push the price down.
Where an AA corporate bond yields 1.5%, a BB one may have to offer 4% to find buyers.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.