Angel Bond

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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.

INVESTOPEDIA EXPLAINS '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. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Junk Bond

    A colloquial term for a high-yield or non-investment grade bond. ...
  3. Bond Rating

    A grade given to bonds that indicates their credit quality. Private ...
  4. Investment Grade

    A rating that indicates that a municipal or corporate bond has ...
  5. Fallen Angel

    1. A bond that was once investment grade but has since been reduced ...
  6. Ratings Service

    A company, such as Moody's or Standard & Poor's, that rates ...
RELATED FAQS
  1. What are the risks of investing in a bond?

    The most well-known risk in the bond market is interest rate risk - the risk that bond prices will fall as interest rates ... Read Full Answer >>
  2. What does investment grade mean?

    Credit ratings provide a useful measure for comparing fixed-income securities, such as bonds, bills and notes. Most companies ... Read Full Answer >>
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