DEFINITION of 'Angel Bond'

Investment-grade bonds that pay a lower interest rate because of the issuing company's high credit rating. Angel bonds are the opposite of fallen angels, which are bonds that have been given a "junk" rating, and are therefore much more risky.

BREAKING DOWN 'Angel Bond'

An investment-grade bond is rated at minimum 'BBB' by S&P and Fitch, and 'Baa' by Moody's. If the company's ability to pay back the bond's principal is reduced, the bond rating may fall below investment-grade minimums and become a fallen angel.

RELATED TERMS
  1. High-Yield Bond

    A high paying bond with a lower credit rating than investment-grade ...
  2. High-Yield Bond Spread

    The percentage difference in current yields of various classes ...
  3. Collateralized Bond Obligation ...

    An investment-grade bond backed by a pool of junk bonds. Junk ...
  4. Bond Rating

    A grade given to bonds that indicates their credit quality. Private ...
  5. Bond

    A debt investment in which an investor loans money to an entity ...
  6. Archangel

    An angel investor who has invested in a number of ventures that ...
Related Articles
  1. Investing

    Another Way to Think About Junk Bond ETFs

    Fallen angel bonds can be a fine complement or alternative to traditional high-yield bonds.
  2. Investing

    What's a High-Yield Bond?

    A high-yield bond is a bond issued by a company with a very low credit rating.
  3. Investing

    The Appeal of Crossover Bonds

    Bonds that tend to cross from junk to investment-grade status, or the other way around, can provide interesting investment opportunities. Here's a look,
  4. Investing

    Junk Bonds in Stressed Market Conditions

    In stressed market conditions, particularly in economic recessions, junk bonds should be examined and monitored with additional prudence.
  5. Investing

    A Fallen Angel ETF that is not so Fallen

    Data indicate this might be a better alternative to regular junk bond funds.
  6. Investing

    How Rising Interest Rates Affect Junk Bonds

    We examine the impact of rising interest rates on higher-yielding bonds.
  7. Investing

    Is the Junk Bond Market Signalling a Correction?

    Is the junk bond market signalling a correction?
  8. Investing

    Corporate Bond Basics: Learn to Invest

    Understand the basics of corporate bonds to increase your chances of positive returns.
  9. Investing

    The Basics Of Bonds

    Bonds play an important part in your portfolio as you age; learning about them makes good financial sense.
  10. Investing

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
RELATED FAQS
  1. What causes a bond's price to rise?

    Learn about factors that influence the price of a bond, such as interest rate changes, credit rating, yield and overall market ... Read Answer >>
Hot Definitions
  1. Notional Value

    The total value of a leveraged position's assets. This term is commonly used in the options, futures and currency markets ...
  2. Interest Expense

    The cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. ...
  3. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  4. Pro-Rata

    Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the ...
  5. Private Placement

    The sale of securities to a relatively small number of select investors as a way of raising capital.
  6. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
Trading Center