What is a BB rated bond?

BB -rated bonds are non-investment grade, which suggests a relatively high credit risk. It signifies that the borrower's ability to meet its financial obligations is considered to be speculative or "junk”. BB is equivalent to Moody's Ba2 rating.

What is a bond credit rating?

In investment, the bond credit rating represents the credit worthiness of corporate or government bonds. It is not the same as an individual's credit score. The ratings are published by credit rating agencies and used by investment professionals to assess the likelihood the debt will be repaid.

Are BBB-rated bonds a good investment?

The rise of the lowest rating in the investment grade universe, BBB-rated bonds, since the credit crisis of 2008 confirms the decreasing credit quality of the bond market (see chart). The amount of BBB-rated debt outstanding in the US has almost tripled since 2008, to around $2tn.

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