How can we help you?

Are eurobonds safe investments?

Are euro-bonds safe investments? It is commonly agreed that (euro)bonds are safe investments. The quality of a eurobond depends on the solvency of the issuer. This solvency is closely monitored by specialized rating agencies such as Standard & Poor's and Moody's. These agencies provide an assessment ("a rating") regarding the solvency of the issuer and, consequently, the safety of the bond.

What is the rating of a bond? The issuer's quality is often expressed through its "rating," which provides an idea of its solvency. This raises the question: How can the bondholder (the investor) be sure that the issuer will fulfill all its obligations? In addition to periodic interest payments, the issuer must be capable of repaying the nominal amount of the bond at maturity. There is more than one "rating agency" that pursues the same objective: assessing the issuer's solvency in the bond market. The most well-known rating agencies are Standard & Poor's and Moody's. After conducting a thorough analysis of the issuers, these agencies assign a "credit rating" that indicates the solvency of these issuers.

Note: One must always pay attention to the ratings of bonds when comparing yields.

This article does not contain any investment advice or recommendation, nor a financial analysis. Nothing in this article may be construed as information with a contractual value of any sort whatsoever. This article is intended for information only and does not constitute in any way a commercialization of financial products. Keytrade Bank cannot be held liable for any decision made based on the information contained in this article, nor for its use by third parties. Every investment entails risks such as a possible loss of capital. Before investing in financial instruments, please inform yourself properly and read carefully the document "Overview of the principal characteristics and risks of financial instruments" that you can find in the Document centre