Corporate Bonds

As of: Mon, 22 Feb 2016 03:31 PM EST. Tables updated hourly. Data available real-time to IB customers in Trader Workstation.



Moody's Ratings Overview

Moody's Investor Service rates the long-term debt of many companies and assigns its bonds a rating, adopting a two-tier structure to discern between two types of ratings. The system creates a watershed for investors wanting to distinguish between Investment Grade and Non-Investment Grade corporate bonds. Some investors will only invest in a specific quality of bonds that are awarded a sufficiently high rating by one of several ratings agencies.Other agencies include Standard& Poors and Fitch & Co.

Investment Grade are the highest rated corporate bonds and in the opinion of the ratings agency are less likely to default on their principal and coupon repayments than companies whose bonds are rated Non-Investment Grade. Typically, Investment Grade rated corporate bonds carry lower yields than Non-Investment Grade bonds. The cost of raising capital is therefore higher to companies with weaker ratings and reflects the associated risks of investments.

The current Moody's rating scale ranks Investment Grade corporate bonds from the highest ratings to the lowest in the following order: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3.

Non-Investment Grade corporate bonds are rated from the highest ratings to the lowest in the following order: Ba1, Ba2, Ba3, B1, B2, B3, Caa1, Caa2, Caa3, Ca and C.

A reading of WR defines a rating that has been withdrawn by Moody's indicating that it is not currently rated by the agency.

Disclosures

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.