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Bond rating |
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Bond ratingA rating based on the possibility of default by a bond issuer. The ratings range from AAA (highly unlikely to default) to D (in default). See: Rating, investment grade.Bond ratingCorporate and government bonds are generally considered a safe form of investment compared to shares, in the sense that you are 'guaranteed' to get repayment of the principal and interest payments. But the value of the 'guarantee' depends substantially on who has issued the bond - a financially healthy issuer, or one that is struggling to meet its borrowing obligations.Credit rating agencies like Moody's and Standard & Poor's (S&P) and Fitch IBCA provide a service to the investment community by grading bonds according to how likely it is that the issuer will default either on interest or capital payments.For S&P the ratings vary from AAA (the most secure) to D which means the issuer is already in default.For Moody's the ratings go from Aaa to D.Only bonds with a rating of BBB or better are considered 'investment grade' - that is, secure enough for institutions to invest in. Anything below that grade is 'non-investment grade' or 'junk'.The ratings which S&P and Moody's give a bond are continually checked and revised in the light of new research done by those firms. When a bond is downgraded it is a serious event for the issuer because it makes it harder (or more expensive) to raise new borrowings, but it is also bad news for holders of the bonds, because the market invariably marks down the value of the bond.Similar MatchesOperating expensesOperating expensesThe amount paid for asset maintenance or the cost of doing business. Earnings are distributed after operating expenses are deducted. Operating costsOperating costsAlso known as overheads, these are the costs which are additional to the direct costs of manufacturing or of providing services. Operating cash flowOperating cash flowEarnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. Operating riskOperating riskThe inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. Operating profitOperating profitA company's profit after deducting its operating costs from gross profit. Further SuggestionsratingHulbert rating Operating system Morningstar rating system Operating Assets Credit rating Chief Operating Officer (COO) Operating profit margin Operating rate Operating cycle Stock rating Experience rating credit rating Operating leverage operating margin Net operating loss carrybacks Whites rating Split rating Appel Loan (Accelerating Payoff Progressive Equity Loan) Operating lease Credit Rating Agencies Non Vessel Operating Common Carriers (NVOCC) Short run operating activities S&P Rating Operating in the red |
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