A

- a la shmoop. what our bond ratings and what do they mean?

all right well pressed, we'd say Sean Connery,

but Daniel Craig has been pretty amazing and exceeded all expectations right? okay [Actors Connery and Craig shown]

okay so we love double-oh-seven but well that has nothing to do with this topic.

here we're referring to how risky or safe a given bond is. if you just landed

on earth remember that a bond is a promise to pay back money after having

rented it in the form of interest payments for a given period of time. and

some bonds are well ,they're risky. famously the bonds issued by the

territory of Puerto Rico went crashing to the ground when the country [Puerto Rican city pictured waving a white flag]

essentially declared bankruptcy in 2017. well corporate bonds die as well as

government bonds. when the internet and wireless technology radically changed

the economics of the radio and newspaper industries well many of those

corporations saw their bonds kissed the perimeters of bankruptcy. so bonds can be

risky despite the vast 99% plus of them who fully pay back their interest and

principal on schedule. but some don't though or have to delay payments or have

other issues and to account for this risk and to communicate that risk to [two workers from Chase bank stand hands on hips shaking heads]

would-be investors, there are rating services who assess the borrower's

ability and likelihood to pay back the money they have promised to the you know

pay back. well the top ratings are shown here,

those triple-a bonds are a really good ones. if a bond flunks completely well it

gets something in the C range. that we have California grade inflation here and [bond rating chart pictured]

you know talk about grading on a curve. and that is how you get your bonds

shaken and not stirred. [man holds martini glass]