All else equal, unless it possesses some sort of major offsetting advantage that makes the risk of non-payment low, a company with a low - interest coverage ratio will almost assuredly have bad bond ratings, increasing the cost of capital; e.g., its bonds will be classified as junk bonds
rather than investment grade bonds.
Not exact matches
This is a market - based estimate of the amount of fear in the
bond market Bass - rated
bonds are the lowest quality
bonds that are considered
investment -
grade,
rather than high - yield.
Rather than pursue cross-over corporates or high - yield or even long - term
investment grade corporates, we have stayed near the middle of the curve with funds like: (1) SPDR Nuveen Muni (TFI), (2) Vanguard Total
Bond (BND), (3) iShares 7 - 10 Year Treasury (IEF) and (4) iShares 3 - 7 Year Treasury (IEI).
are expressing perplexity over the market for
bonds, which is institutional and driven by accounting and regulatory concerns (ALM, pension funding regs, risk charges on surplus for holding equities, marking
investment grade bonds at amortized cost
rather than to market, etc.).