What is a BBB rated bond?

Bonds rated above BBB- (or Baa3 in the Moody's rating scale) are considered investment-grade. This means that most institutional investors are permitted to own the bonds. Bonds rated lower than BBB- are considered speculative, which is another way of saying, "Invest at your own risk."

What are the major bond rating agencies?

Standard & Poor's, Moody's, and Fitch Ratings are the major bond rating agencies. Although their rating systems are slightly different in terms of the numbers and symbols used, a triple-A rating is widely considered the gold standard when it comes to bond quality.

What does a BBB rating mean?

Still, on the whole, ratings agencies try to keep the investing public informed about the financial health of any issuing company. Bonds rated above BBB- (or Baa3 in the Moody's rating scale) are considered investment-grade. This means that most institutional investors are permitted to own the bonds.