Different bond grades have different economic meanings. Taking the bond credit rating of Standard & Poor's Company as an example, the economic meaning of each bond rating is as follows:
AAA grade: This is the highest grade bond, indicating that the bond issuer has strong ability to repay the principal and interest.
AA level: indicates that the bond issuer has strong ability to repay the principal and interest, which is only slightly different from AAA level.
Grade A: It means that the bond issuer has a strong ability to repay the principal and interest, but its ability to repay the principal and interest is easily affected by unfavorable factors such as changes in the environment and economic conditions.
BBB level: indicates that it has sufficient ability to repay the principal and interest, but the regulations stipulate that once the economic conditions change, the repayment index will be revised, which may lead to the weakening of the ability to repay the principal and interest.
Grade BB, grade b, grade CCC and grade CC: indicating that they are speculative in the ability to repay the principal and interest, in which grade BB indicates the lowest degree of speculation and grade CC indicates the highest degree of speculation. Because this bond seems to have
A certain quality has some security features, but these factors are overwhelmed by a lot of uncertainties or risks, so this kind of bond has great risks with the change of conditions. Grade c: bonds that cannot pay interest. Grade D: indicates the default bond, and the principal and interest payable are unpaid. The above grades from AA to B can usually be fine-tuned with+and-. For example, "AA+" means that the grade is slightly higher than AA but slightly lower than AAA, and "BB-" means that the grade is slightly lower than BB but slightly higher than B.