Before you buy a bond, get an idea of how much financial muscle the issuer has. Bond ratings are available through any brokerage house. Three of the most popular rating services are Moody’s, Standard & Poor’s, and Fitch. The following table shows the system each uses to rate bonds:
| Credit risk ratings | Moody’s | Standard & Poor’s | Fitch |
|---|---|---|---|
| Investment grade | |||
| Tip-top quality | Aaa | AAA | AAA |
| Premium quality | Aa | AA | AA |
| Near-premium quality | A | A | A |
| Take-home-to-Mom quality | Baa | BBB | BBB |
| Not investment grade | |||
| Borderline ugly | Ba | BB | BB |
| Ugly | B | B | B |
| Definitely don’t-take-home-to-Mom quality | Caa | CCC | CCC |
| You’ll be extremely lucky to get your money back | Ca | CC | CC |
| Interest payments have halted or bankruptcy is in process | C | D | C |
| Already in default | C | D | D |
Bond ratings are available through any brokerage house.