A rating agency’s assessment of how likely a borrower is to repay its debt fully and on time.
S&P, Moody’s and Fitch use scales from AAA (highest quality) to D (default). Bonds rated BBB− or better are investment grade, anything below is high yield or “junk”. Lower ratings mean higher interest costs for the issuer. Ratings are opinions, not guarantees – before 2008 many mortgage securities that later became nearly worthless carried AAA ratings.