A grade given by rating agencies to assess how likely a bond issuer is to pay back its debt. Ratings range from very safe, like AAA, to very risky, like D. Better credit ratings mean lower risk but typically come with lower yields.
The U.S. government has a AAA credit rating because it has never defaulted on its debt. A struggling company might have a rating of BB, reflecting higher risk of default. Investors require higher yields from the struggling company to compensate them for that extra risk.
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