Investment Grade Debt

Investment-grade debt refers to bonds or loans issued by companies or governments considered financially stable and creditworthy. These entities have a strong track record of repaying debt, meaning borrowers are unlikely to default. Such debt is rated "investment grade" by credit rating agencies, typically with ratings of BBB- (or Baa3) and above. Because of their lower risk, investment-grade debt usually offers lower interest rates compared to riskier, non-investment-grade or "junk" bonds. Investors see these as a safer way to earn steady income while preserving capital, suitable for conservative investment strategies.