Bond credit rating is mostly corporate bond credit rating, which evaluates the reliability of repayment of principal and interest on schedule for specific bonds issued by enterprises with independent legal personality, and marks its credit rating. This credit rating is to provide information services for investors to buy bonds and the circulation and transfer of bonds in the securities market.
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The main reason of bond credit rating is to facilitate investors to make bond investment decisions. Investors have to bear certain risks when buying bonds. If the issuer fails to repay the principal and interest at maturity, investors will suffer losses, which is called credit risk. The credit risk of bonds varies with the repayment ability after issuance.
It is very important for investors, especially small and medium investors, to know the credit rating of bonds in advance. Due to the limitation of time, knowledge and information, it is impossible to analyze and select many bonds. Therefore, it is necessary for professional institutions to objectively, fairly and authoritatively evaluate the debt repayment reliability of the bonds to be issued, that is, to carry out bond credit rating, so as to facilitate investors' decision-making.
Baidu Encyclopedia-Bond Credit Rating