bond rating

Definition

A measure of the quality and safety of a bond, based on the issuer's financial condition. More specifically, an evaluation from a rating service indicating the likelihood that a debt issuer will be able to meet scheduled interest and principal repayments. Typically, AAA is highest (best), and D is lowest (worst).

Use bond rating in a sentence

The bond rating of the bond they purchased was extremely low and Jake was very concerned that there would be no profit, only loss, from such a venture.

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Bond ratings, most notably as issued by investor services giants like Moody's Investor Services, are a grading system designed to advise investors of the risk involved in purchasing debt instruments with regard to likelihood of the issuer's ability to service the debt by making scheduled interest and principle repayments on time.

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Even though I may end up with a lower return on my investment, I typically invest in bonds with a higher bond rating to ensure that my investments are closer to being guaranteed.

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