how are bond s rated 
credit ratings for a company and its bonds are generated by credit rating agencies like standard and poor s moody s and fitch ratings the very highest quality bonds are called investment grade and include debt issued by the u s government and very stable companies such as many utilities 1213 bonds that are not considered investment grade but are not in default are called high yield or junk bonds these bonds have a higher risk of default in the future and investors demand a higher coupon payment to compensate them for that risk 14