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- a la shmoop. what our bond ratings and what do they mean?

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all right well pressed, we'd say Sean Connery,

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but Daniel Craig has been pretty amazing and exceeded all expectations right? okay [Actors Connery and Craig shown]

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okay so we love double-oh-seven but well that has nothing to do with this topic.

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here we're referring to how risky or safe a given bond is. if you just landed

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on earth remember that a bond is a promise to pay back money after having

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rented it in the form of interest payments for a given period of time. and

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some bonds are well ,they're risky. famously the bonds issued by the

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territory of Puerto Rico went crashing to the ground when the country [Puerto Rican city pictured waving a white flag]

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essentially declared bankruptcy in 2017. well corporate bonds die as well as

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government bonds. when the internet and wireless technology radically changed

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the economics of the radio and newspaper industries well many of those

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corporations saw their bonds kissed the perimeters of bankruptcy. so bonds can be

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risky despite the vast 99% plus of them who fully pay back their interest and

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principal on schedule. but some don't though or have to delay payments or have

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other issues and to account for this risk and to communicate that risk to [two workers from Chase bank stand hands on hips shaking heads]

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would-be investors, there are rating services who assess the borrower's

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ability and likelihood to pay back the money they have promised to the you know

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pay back. well the top ratings are shown here,

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those triple-a bonds are a really good ones. if a bond flunks completely well it

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gets something in the C range. that we have California grade inflation here and [bond rating chart pictured]

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you know talk about grading on a curve. and that is how you get your bonds

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shaken and not stirred. [man holds martini glass]

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