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Which of the following is considered the lowest investment grade bond? BB rated Gamestop bonds AA...

Which of the following is considered the lowest investment grade bond?

BB rated Gamestop bonds

AA rated Exxon Mobile bonds

D rated Sears bonds

A rated Southwest Airlines bonds
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Answer #1

Investment grade bonds range from AAA to BBB- for S&P or Aaa to Baa3 for Moody's.

Non - investment grade bonds range from BB+ to D for S&P or Ba1 to C for Moody's.

Investment grade bonds have the following ratings (From highest to lowest) -

Moody's S&P
Aaa AAA
Aa1, Aa2, Aa3 AA+, AA, AA-
A1, A2, A3 A+, A, A-
Baa1, Baa2, Baa3 BBB+, BBB, BBB-

Therefore, in our case, A rated Southwest Airlines bonds are the lowest investment grade bond.

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