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. Angel Investor

    An investor who provides financial backing for small startups ...
  2. Bond Rating

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

    A debt investment in which an investor loans money to an entity ...
  4. Collateralized Bond Obligation ...

    An investment-grade bond backed by a pool of junk bonds. Junk ...
  5. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
  6. Credit Market

    1. The broad market for companies looking to raise funds through ...
Related Articles
  1. 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,
  2. Investing

    Investment Grade Vs. Junk Bonds: Which for 2016?

    Understand why investors are fleeing junk bonds amid global economic uncertainty, and learn why investment-grade bonds might be a better choice in 2016.
  3. 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.
  4. Managing Wealth

    When Your Business Needs Money: Angel Investors

    If you have a promising business that needs a boost, you may be able to put your faith in these wealthy investors.
  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

    The Pros and Cons of High-Yield Bonds

    Junk bonds are more volatile than investment-grade bonds but may provide significant advantages when analyzed in-depth.
  7. Investing

    Junk Bonds: Everything You Need To Know

    Don't be fooled by the name - junk bonds may be for you if you know how to analyze them.
  8. Investing

    How Rising Interest Rates Affect Junk Bonds

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

    The Basics Of Bonds

    Bonds play an important part in your portfolio as you age; learning about them makes good financial sense.
RELATED FAQS
  1. Where can I find information about corporate bond issues?

    Learn information about corporate bond investments, including where investors can access information about new corporate ... Read Answer >>
  2. How are junk bonds rated differently by Standard & Poor's and Moody's?

    Learn how credit rating agencies rate bonds with junk bond status, and understand how downgrade risk can impact the price ... Read Answer >>
  3. How do the returns on municipal bonds compare to those of other bonds?

    Learn how tax-free municipal bonds may provide better returns than other types of bonds, and understand the risks of municipal ... Read Answer >>
  4. What can cause a security to go from investment grade to "junk" grade?

    Learn why bonds may be downgraded from investment grade to junk grade, and what impact this can have on the bond's price ... Read Answer >>
Hot Definitions
  1. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  2. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  3. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  4. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities ...
  6. Wash-Sale Rule

    An Internal Revenue Service (IRS) rule that prohibits a taxpayer from claiming a loss on the sale or trade of a security ...
Trading Center