what is an investment grade bond 
an investment grade bond is a so called high quality or low risk bond it is considered to be a fairly safe bet and has a very low rate of default bonds rated aaa aa a and bbb are considered investment grade 1the bottom linea bond rating is a grading given to a bond that indicates its creditworthiness bond ratings are assigned by agencies such as moody s standard poor s and fitch ratings and reflect an analysis of the bond issuer s financial strength or capacity to pay a bond s principal and interest the rating organizations assign grades to the bond such as aaa which indicates lower risk or b which indicates greater risk higher risk bonds offer higher yields while lower risk bonds offer lower yields 1