High Yield / Non-investment Grade

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The definition of infrastructure finance is not always clear. It is primarily a type of project finance. Governments are usually the ones that determine which industries can be considered as infrastructure. However, some characteristics are common:
- industries that are essential to the economy (transportation, telecommunications, electricity, etc.);
- industries of strategic importance.
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.