Rating

The classification of the quality of bonds by various independent, professional rating services. A bondholder expects to receive back the original investment, plus interest payments. But the likelihood of this and the rate of interest received will depend on the credit-worthiness of the borrower. Governments of leading nations, for example, can be relied on to honour their obligations to bondholders while companies and governments of developing nations sometimes default. Rating agencies such as Standard & Poors, Moodys and Fitch give ratings to bonds to help analysis.