Debt (such as a bond or a loan) is considered investment grade if it has been assigned a credit rating of:

The term indicates that the debt being rated is of sound credit quality. Debt that is not rated highly enough to be considered investment grade is referred to as speculative or "junk." Investment grade debt usually has more favorable terms and lower pricing for the borrower.

For more information on credit ratings generally, see Practice Note, Credit Ratings and Credit Rating Agencies. For information on the issuance of investment grade bonds, see Practice Note, Debt Securities: Overview. For additional information on investment grade loans, see Practice Note, Investment Grade Loans.