Also known as a "bond rating."
An individual bond or bond mutual fund's credit quality is determined by private independent rating agencies such as Standard & Poor's, Moody's and Fitch. Their credit quality designations range from high ('AAA' to 'AA') to medium ('A' to 'BBB') to low ('BB', 'B', 'CCC', 'CC' to 'C').
Investors interested in the safety of their bond investments should stick to investment grade bonds ('AAA', 'AA', 'A', and 'BBB'), while other investors willing and able to accept a higher level of risk could consider lower credit-quality bonds.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
credit quality — A measure of a bond issuer s ability to repay interest and principal in a timely manner. rating agencies assign letter designations such as AAA, AA, and so forth ( ratings). The lower the rating, the higher the probability of default. Bloomberg… … Financial and business terms
distribution by credit quality — Classification of a portfolio s securities according to credit rating. Bloomberg Financial Dictionary … Financial and business terms
Credit Valuation Adjustment — Credit value adjustment (CVA) is by definition the difference between the risk free portfolio value and the true portfolio value that takes into account the possibility of a counterparty’s default. In other words, CVA is the market value of… … Wikipedia
Credit rating agency — Corporate finance … Wikipedia
quality — ▪ I. quality qual‧i‧ty 1 [ˈkwɒlti ǁ ˈkwɑː ] noun qualities PLURALFORM 1. [countable] something such as courage, intelligence, or loyalty that people may have as part of their character: • You need special personal qualities to work as a nurse. 2 … Financial and business terms
Credit risk — Categories of financial risk Credit risk Concentration risk Market risk Interest rate risk Currency risk Equity risk Commodity risk Liquidity risk Refinancing risk … Wikipedia
Credit default swap — If the reference bond performs without default, the protection buyer pays quarterly payments to the seller until maturity … Wikipedia
Credit Sleeve — A form of credit agreement, backed by physical assets, where the lending party will provide working capital and collateral to another company, known as the sleeve provider . The lending party will essentially co guarantee certain outstanding… … Investment dictionary
Credit enhancement — Securities Securities Bond Stock Investment fund Derivative Structured finance Agency security … Wikipedia
Credit default swap index — A credit default swap index is a credit derivative used to hedge credit risk or to take a position on a basket of credit entities. Unlike a credit default swap, which is an over the counter credit derivative, a credit default swap index is a… … Wikipedia