Borrowers-the companies issuing bonds-are given credit ratings by credit agencies such as Standard & Poor's and Moody's. This means that they are graded, or rated, according to their ability to repay the loan to the bondholders. The highest grade (AAA or Aaa) means that there is almost no risk that the borrower will default-fail to pay interest or to repay the principal. Lower grades (e.g. Bbb, BBB,C,etc.)mean an increasing risk of the borrower becoming insolvent-unable to pay interest or repay the capital.