According to Moody's, Ba and below are considered what?

• A. Investment grade
• B. A rating above investment grade
• C. Lower medium and non-investment grade
• D. High grade

Answer: (C)

Moody's splits ratings into investment grade and non-investment (speculative) grade. Ratings at Ba1, Ba2, Ba3 are just below investment grade, and Moody's describes that region as lower medium grade, plus anything below it as non-investment grade. So Ba and below are considered lower medium and non-investment grade. This signals higher credit risk and typically higher yields, compared with investment-grade issuers.

They aren’t investment grade, nor higher-than-investment-grade, and the label high grade isn’t a Moody’s category, so the correct description is that Ba and below fall into lower medium and non-investment grade.