There are many types of bonds, and there are different classifications in different bond products. So what I want to introduce to you today is investment-grade bonds and non-investment bonds. Let's take a look at what they are.
Introduction to investment grade bonds
Standard & Poor's has rated the bonds as Grade 4 and Grade 12: AAA, AA, A, BBB, BB, B, CCC, CC, C, DDD, DD, D In order to more accurately reflect the nuances within each level, a "+" or "-" symbol may be added at each level to indicate the difference. In this way, dozens of small levels can be formed. Investment grade is BBB.
Introduction to non-investment grade bonds
Non-investment grade bonds are junk bonds, also known as high-risk bonds. The early 1980s coincided with the period of large-scale adjustment and reorganization of the U.S. industry. The resulting renewal and the funds required for mergers and acquisitions were far from sufficient on the stock market alone. In addition, during the industrial adjustment period, these enterprises were more risky and profit-oriented Commercial banks cannot fully meet their funding needs, which is an important background for junk bonds. The deregulation of financial controls in the United States is reflected in the securities market, which is to relax the review and management of securities issuers, resulting in low-quality junk bonds. The widespread use of leveraged buyouts, that is, small companies acquire larger companies through high debt. After the 1980s, the US economy entered a recovery, and the economic boom made the securities market more prosperous.
Investors can check out investment-grade bonds and non-investment-grade bonds for more financial knowledge. If you want to express your own investment ideas, you can visit the Followme trading community.
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