Investment Grade Corporate Bonds

Corporate bonds are debt securities issued by a corporation. The backing for the bond is based on the ability of the issuing company to make full and timely interest payments and redemption of principle upon maturity. Interest payments are made from operating revenue. In some cases, the company's physical assets may be used as collateral for bonds. The primary means of determining the quality of a bond is its credit rating that reflects the credit worthiness or risk of default. Credit ratings are issued by private agencies including Standard & Poor’s, Fitch, and Moody’s. Bonds rated BBB, A, AA, or AAA are considered to be “investment grade” bonds that offer security of principle and timely payment of interest payments.

Standard & Poor’s defines ratings as follows:

• AA and AAA are high credit quality investment grade
• A and BBB are medium credit quality investment grade
• C, CC, CCC, B, and BBB are low quality, non-investment grade
• D are bonds that are in default

Investment Grade Corporate Bonds offer the savvy investor the opportunity to invest in bonds that offer excellent security of principle and interest and outstanding income yields. Due to recent market instability driven by the credit crisis, subprime mortgage market, and liquidity crunch, select investment grade corporate bonds are yielding anywhere from 300 to 700 basis points over that offered by Treasuries. These same securities have traditionally traded at 100 to 200 basis points over Treasuries. Your APS Financial Representative has access to thousands of investment grade corporate bond offerings that offer you outstanding risk/reward investment characteristics.

• All Corporate Bond Offerings