Credit rating

Most bonds are allocated a credit rating to indicate to an investor the likelihood of a subsequent default. The three firms, or ‘agencies’ that specialise in awarding these ratings, Standard and Poors, Moody’s and Fitch do so by looking at a number of factors that could increase or decrease this risk including the credit quality of the issuer, their ability to cover interest payments from profits and any security – usually in the form of assets such as property – on offer. The ratings then vary from AAA ‘triple A’ for safe, low risk bonds, typically issued by high quality institutions like the UK government and blue-chip companies, down to D for those which have failed to make a coupon payment on time and are therefore in default. Many fund managers are obliged by the regulator to hold ‘investment grade’ bonds meaning those with a credit rating of BBB and above.

• See Tim Bennett’s video tutorial: Do we need ratings agencies?

Paul Hodges: house prices could fall 50% in 'Great Unwinding'

Merryn Somerset Webb interviews Paul Hodges about deflation, the global economy's 'Great Unwinding', and how Britain's house prices could halve.


Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.


28 January 1896: The world's first speeding ticket

119 years ago today, motorist Walter Arnold was caught tearing through Paddock Wood in Kent at a hair-raising 8mph, and became the first driver in the world to receive a speeding ticket.