The bond owner can convert it into a share

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When the value of the latter increases and it turns into a more profitable investment opportunity than its bond counterpart. THE MOST IMPORTANT FACTORS FOR EVALUATING GLOBAL BONDS 1. Credit rating Some global financial authorities determine the credit rating of bonds. The classification shows the ability of the bond issuer to pay the value of the bonds and their returns to their holders or owners.

The most important bond classification bodies: Standard Telegram Number Data and Poor's (S&P) Moody's Fitch The previous bodies help investors know what bonds have a good or average credit rating through the level system. The most important levels of credit rating: (AAA) is a rating indicating that the bonds provide the highest possible degree of security. (BBB) ​​means medium risk credit rating. (CCC) means a credit rating that contains a high risk rate. (DDD) means a defaulted credit rating. Each of the previous classifications has its own sub-classifications. For example, the AAA classification has Aaa, Aa1, and others, as is the case with the rest of the previous classifications.




The sub-classifications clarify the entity’s ability to repay bonds on an accurate and clear scale. In general, bonds are credit-classified into two types: the first type is investment grade, which are bonds with a good credit rating, while the second type is high-yield bonds, also known as junk bonds. As is clear, scrap bonds contain a higher risk and uncertainty regarding paying their value to their holders. This prompts the issuers of these bonds to offer a high return to attract investors and push them to buy them. For your information, junk bond returns represented about two-thirds of total global bond returns, while investment bond returns represented the last third.