What are Class C Investment Bonds?

A bond is a debt security. It is a loan to a government or corporate entity. The investor receives a promise from the issuer of the bond to pay back an interest rate in a set amount of time to the investor. Investment bonds are rated by a lettering system. This rating indicates the quality of the investment bond C is the lowest rating given to a bond.

Types of Bonds

There are a variety of bonds to invest in. Some choices are municipal, corporate and convertible investment bonds.  All bonds have different ratings and maturities. Risk is the major factor in deciding where and when to invest your money for the highest yield on return from your money.

Rating System for Investment Bonds

A rating system is provided for investors. It is run by independent entities to give investors information about the quality of the bonds credit worthiness. The information given is based on the probability of the bond’s ability to be paid back by the issuer in the time promised.

Format of Rating

The companies that rate bonds use a lettering system to show which bonds are credit worthy. Moody's and S&P Fitch rate the bonds by lettering them from the highest quality to the lowest. The lettering is a little different with each of them but basically AAA or Aaa is the highest rating of a stock stating that it is credit worthy and a safe risk for investment. C ratings are considered junk bonds and are highly speculative. Companies with this rating are in financial trouble. Therefore, the risk of investing with them is at the highest. At this rating they offer a higher yield. Some investors take that risk at with the hopes of the issuer recovering and the hopes that they will make more money from their investment. 

At best, investing in a "C" rated investment bond is an unsure way of making money.