What is a BBB credit rating?

A lower-medium-grade credit rating given to a prospective borrower. Sometimes known as a BAA2 rating (given by S&P), a BBB score from Moody's, suggests a company or government has an adequate but not overly strong ability to meet all its financial commitments.

What does a BB rating mean?

A bond with a BB rating is considered as non-investment grade, which is commonly referred to as high-yield or junk bond. This means that the issuer of the bond has an elevated risk of defaulting on their debt obligations and therefore the bond carries a higher risk, yet also pays higher yields.

What percentage of the investment grade market is BBB rated?

Today, the BBB-rated segment now makes up over 50% of the investment grade market versus only 17% in 2001. Over the past decade, U.S.-related BBB corporate debt has grown 2.2x to $2.5 trillion, representing $1.2 trillion of net new issuance and $745 billion of downgrades from a higher credit quality. 2

What is a good credit rating for a bond?

"AAA" and "AA" (high credit quality) and "A" and "BBB" (medium credit quality) are considered investment grade. Credit ratings for bonds below these designations ("BB," "B," "CCC," etc.) are considered low credit quality, and are commonly referred to as " junk bonds ."