High Yield / Non-Investment Grade

What is High Yield/Non-Investment Grade?
A high yield debt security pays a high return to compensate for the larger counterparty risk associated with the investment. Counterparty risk (risk of loss due to the default of a counterparty) can be measured and rated. The main rating agencies (Standard & Poor's, Fitch, Moody's) evaluate issuers' ability to repay their debts, i.e., to repay the right amounts on the right dates, and assign them a corresponding rating.
Bond Ratings | |||
Moody’s | S&P | Fitch | Category |
Aaa | AAA | AAA | Investment grade |
Aa1 | AA+ | AA+ | |
Aa2 | AA | AA | |
Aa3 | AA- | AA- | |
A1 | A+ | A+ | |
A2 | A | A | |
A3 | A- | A- | |
Baa1 | BBB+ | BBB+ | |
Baa2 | BBB | BBB | |
Baa3 | BBB- | BBB- | |
Ba1 | BB+ | BB+ | High yield Non-Investment grade Speculative grade |
Ba2 | BB | BB | |
Ba3 | BB- | BB- | |
B1 | B+ | B+ | |
B2 | B | B | |
B3 | B- | B- | |
Caa1 | CCC+ | CCC | |
Caa2 | CCC | ||
Caa3 | CCC- | ||
Ca | CC | CC | |
C | C | C | |
D | D | D | Default |
Higher quality bond issuers (AAA to BBB-) are considered investment-grade or good quality. Issuers with a rating of BB+ to below are seen as riskier, and they are typically referred to as Non-Investment Grade, Speculative Grade or High Yield. From the investor’s point of view, High-Yield Bonds can be attractive because of the higher expected return compared with securities with low counterparty risk.
Our latest news and insights
Listen to discover how private credit is reshaping investment strategies and market dynamics.

A video interview with Lénaïg Trénaux, Global Co-Head of Energy, Mining and Industries and Head of Sustainable and...

Societe Generale helps corporates navigate a rapidly changing payments ecosystem by bringing together traditional...