Which bonds are AAA rated?
Standard & Poor's and
On August 1, 2023 Fitch downgraded USA long-term credit rating to AA+ from AAA. Following the downgrade, economists argued that higher interest rates will result in higher mortgage rates and also assert that relying on foreign financing can have risky economic implications.
- Microsoft Corporation (MSFT) : Free Stock Analysis Report.
- Johnson & Johnson (JNJ) : Free Stock Analysis Report.
- Technology Select Sector SPDR ETF (XLK): ETF Research Reports.
- iShares MSCI Australia ETF (EWA): ETF Research Reports.
- iShares MSCI Germany ETF (EWG): ETF Research Reports.
Bonds rated AAA, AA, A or BBB are considered investment grade while those rated BB, B, CCC, CC, C or D are considered speculative or junk grade bonds.
What Does AA+ Mean? The AA+ rating is issued by S&P and Fitch and is similar to the Aa1 rating issued by Moody's. This rating is still of high quality but it falls below the AAA ranking. It comes with very low credit risk even though long-term risks may affect these investments.
The highest possible rating that a bond may achieve is AAA, which is only bestowed upon those bonds that exhibit the highest levels of creditworthiness. This AAA rating is used by Fitch Ratings and Standard & Poor's, while Moody's uses a similar Aaa lettering.
In 2011, Standard & Poor's, one of Fitch's competitors, also downgraded its rating for the U.S. from AAA to AA+. S&P similarly blamed governance issues – that downgrade followed a similar debt ceiling standoff – as well as the burden of rising government debt.
Corporate bonds are rated by services such as Standard & Poor's, Moody's, and Fitch, which calculate the risk inherent in each specific bond. The most reliable (least risky) bonds are rated triple-A (AAA).
Moody's assigns Aa2 rating to Google's senior unsecured debt.
NEW YORK (S&P Global Ratings) Aug. 20, 2020--S&P Global Ratings today assigned its 'AAA' issue-level rating to Johnson & Johnson's proposed issuance of about $7 billion of senior unsecured notes, in multiple tranches.
Which bond will usually pay a higher interest rate AAA or BBB?
Typically, a AAA-rated bond will have a lower interest rate than a BBB-rated bond. This is so because investors are willing to accept a lesser yield in exchange for lower risk because AAA-rated bonds are thought to be the safest kind of bonds.
Investment grade bonds are assigned “AAA” to “BBB-" ratings from Standard & Poor's and Fitch, and "Aaa" to "Baa3" ratings from Moody's. Junk bonds have lower ratings. The higher a bond's rating, the lower the interest rate it will carry, due to the lower risk, all else equal.
| Bond name | Rating |
|---|---|
| 9.73% L&T FINANCE LIMITED INE691I08305 Unsecured | CARE AAA |
| 6.45% ICICI BANK LIMITED INE090A08UE8 Unsecured | CARE AAA |
| 7.39% HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED INE031A07AP2 Secured | INDIA AAA |
| 8.13% POWER GRID CORPORATION OF INDIA LIMITED INE752E07NV6 Secured | CRISIL AAA |
Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
Bonds with a rating below BBB/Baa have a higher likelihood of failure to repay their debts, and they're called speculative-grade or non-investment grade bonds—a.k.a. junk bonds. They're normally issued by companies that are relatively new or that have faced recent financial difficulties.
Bonds rated lower than BBB- are considered speculative, which is another way of saying, "Invest at your own risk." Bonds with speculative ratings typically have issuers with questionable liquidity and solvency measures.
Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. Obligations rated B are considered speculative and are subject to high credit risk. Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk.
Northwestern Mutual continues to have the highest financial strength ratings awarded to any U.S. life insurer by all four of the major rating agencies: A.M. Best Company, A++ (highest), August 2023; Fitch Ratings, AAA (highest), August 2023; Moody's Investors Service, Aaa (highest), June 2023; S&P Global Ratings, AA+ ( ...
Apple has issued billions of dollars of bonds with maturities out to 50 years, much of it intended to raise the funds for shareholder returns.
Moody's attributed its shift in outlook to declining fiscal stability, as exemplified by the government risking a default on its debt this summer, after Congress failed to raise the debt ceiling.
What is China's credit rating?
| Agency | Rating | Outlook |
|---|---|---|
| S&P | AA- | Negative |
| Moody's | Aa3 | Negative |
| DBRS | A (high) | Stable |
| Moody's | Aa3 | Stable |
1 Foreign governments hold a large portion of the public debt, while the rest is owned by U.S. banks and investors, the Federal Reserve, state and local governments, mutual funds, pensions funds, insurance companies, and holders of savings bonds.
Historically, investment-grade bonds witness a low default rate compared to non-investment grade bonds. For example, S&P Global reported that the highest one-year default rate for AAA, AA, A, and BBB-rated bonds (investment-grade bonds) were 0%, 0.38%, 0.39%, and 1.02%, respectively.
Moody's Seasoned Aaa Corporate Bond Yield is at 5.01%, compared to 5.07% the previous market day and 4.68% last year. This is lower than the long term average of 6.46%. The Moody's Seasoned Aaa Corporate Bond Yield measures the yield on corporate bonds that are rated Aaa.
'AAA' ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
