A credit rating given to a prospective borrower that's not of investment grade Sometimes known as a B2 rating, it suggests a company or government is able to meet its financial commitments but may be left highly exposed to adverse economic conditions.
The rating is applied to the bonds issued by an organisation. Since there's a reasonable chance of default, B-rated bonds are deemed highly speculative investments.
Where have you heard about B credit ratings?
B is some distance away from the very worst credit ratings, but it's also a few rungs down from being of investment grade. Investors may describe bonds with B ratings as junk bonds, since they tend to be riskier and less popular choices.
What you need to know about B credit ratings.
The credit rating given to a company or government can impact on its ability to borrow money. Those with highly speculative ratings, like B, are deemed riskier for investors compared to investment-grade companies. They're given to entities that may have trouble paying their debts, or start-ups with only a limited track record.
On the upside, bonds with a B rating can offer higher returns than investment-grade bonds. These potentially stronger returns effectively compensate investors for the larger degree of risk they're taking on.
Find out more about B credit ratings.
The credit rating system runs all the way from AAA right down to D. To learn more, see AAA (credit rating) and D (credit rating).
