AA- is a high credit rating assigned to long- and medium-term debt securities (with original maturity exceeding at least 1 year). An “AA rating” represents the bond has a high degree of safety + very low credit risk. Now, when the “-” (minus) modifier is added to this rating, it shows these bonds are slightly weaker within this AA category.
As an investor, you must note that AA– rated bonds still have high safety and low credit risk, but their ability to meet debt obligations is more sensitive to changes in the business or economy compared to AAA, AA+, or AA bonds.
If you are looking to invest, below is a list of AA- bonds you may consider in 2025:
(The list of AA- bonds offered by GoldenPi will be covered here)
What are AA- Bonds?
AA– rated bonds are investment-grade debt instruments. They are considered safe, but not as strong as AAA, AA+, or AA bonds. The minus sign (–) in the bond rating of AA– shows the lower end of that rating category.
In India, credit rating agencies like CRISIL, ICRA, CARE, and India Ratings give these ratings after studying a company’s fundamentals. Let’s see what major factors they consider:
| Factors | Meaning |
|---|---|
| Interest coverage ratio | Shows how easily a company can pay interest on its debt |
| Leverage ratio | How much debt the company has compared to its equity |
| Corporate governance | How responsibly the company is managed (management quality) |
| Industry trends and competition | What is the company’s market share and what advantages does it have over its competitors. |
The Relationship Between AA- Bond Rating and Coupon Rate
Bond ratings show the safety of your investment and have a direct relationship with the coupon rate. Higher-rated bonds, like AAA or AA+, are comparatively safe and carry a low default risk. Because of this safety, these bonds usually give lower returns.
Now, if we compare, AA– rated bonds are less safe than AA or AA+. They are still investment-grade, but the risk is slightly higher. Now, to compensate for this higher risk, AA– bonds usually offer a better return than AAA or AA+ bonds.
Thus, as an investor, you must understand that:
- Higher rating (say AAA or AA+) = Lower risk = Lower coupon rate.
- Lower rating within investment-grade (AA–) = Slightly higher risk = Slightly higher coupon rate
This knowledge improves your ability to pick the right financial product. If we talk about AA- bond rate, as of September 16, 2025, you can earn up to 13.75% p.a. investing in AA- bonds. In comparison, you may earn up to 12.10% p.a. with AA+ bonds and up to 10.75% p.a. with AAA bonds.
Who Can Invest in AA- Rated Bonds?
AA– rated bonds may be suitable for conservative investors with moderate risk appetite. These bonds offer non-market-linked returns and could increase your debt portfolio’s overall returns. Some investors who can consider this financial product are:
| Ideal Investors | Why AA- Bonds May Suit? |
| Conservative individual investors | People who do not want any market exposure may invest in AA– bonds for guaranteed interest payments. |
| Small business owners | Entrepreneurs looking to park surplus funds may invest in AA– bonds to earn slightly higher returns than bank deposits. |
| Institutional investors | Several banks, insurance companies, and mutual funds invest in AA– bonds to balance safety and yield in their portfolios. |
| Retirees or fixed-income investors | Those relying on interest income may use AA– bonds to generate regular returns with low risk. |
In Conclusion, AA- Bonds Are Investment-Grade Products That May Offer Competitive Returns!
So now you know that AA– bonds represent the weaker end of the AA category. These bonds are still considered safe and investment-grade, but the issuing companies are financially weaker than those rated AAA, AA+, or AA. Because of this marginally higher risk, AA– bonds may offer comparatively higher returns.
If you want to invest in corporate AA– bonds, AAA-rated bonds, or AA+ options, you can do so online via the GoldenPi platform. The process is 100% digital and can be completed in three easy steps:
- Step 1: Complete your KYC
- Step 2: Choose the right corporate bond
- Step 3: Make payment to invest
For those unaware, GoldenPi is a SEBI registered debt broker and an OBPP (Online Bond Platform Provider) license holder.
AA- Bonds FAQs
What are the latest AA- bond rates in 2025?
As of September 16, 2025, you can get coupon rates up to 13.75% p.a. by investing in AA- bonds. However, your actual yield may differ depending on the actual purchase price.
Are bond ratings fixed?
No, they can be “upgraded” or “downgraded” based on changes in the issuer’s financial health, business performance, or market conditions. As an investor, you should regularly monitor rating changes as downgrades can significantly impact the market price of your bond.
At what price can I purchase AA- bonds in the IPO?
In the primary market, you are purchasing bonds at the “issue price”. This “per bond price” is fixed by the issuing company before the public offer.
What does the “-” minus sign show in AA- rating?
The “–” sign in an AA– rating shows that the bond is on the lower end of the AA category. It still indicates high safety and low credit risk, but the issuer’s financial strength is weaker than those rated AAA, AA or AA+.
Can the price of AA- bonds fall below face value?
Yes, it is a possibility! Once the bonds are listed on the exchange, their price may fluctuate depending on market demand and credit outlook. It may go below the face value or your purchase price, but this fall will not impact your regular interest payments.
Is the interest calculated on actual market price of AA- bonds?
No, the interest on AA– bonds is calculated on the face value (also called par value) of the bond and not its market price. The market price can fluctuate, but the interest payments remain fixed.
Is interest received from AA- bonds exempt?
The interest (coupon) earned on AA– rated bonds is taxed as per your income tax slab. You are required to declare the interest income under the head “Income from Other Sources”.
How do floating rate AA– bonds work?
The coupon rate of floating AA- bonds is linked to a reference rate, such as MIBOR or RBI repo rate. For example, a bond may offer 0.25% + the RBI repo rate.
Now, due to this linkage, your interest income is not fixed and fluctuates with the changes in the reference/ benchmark rate considered.
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Disclaimer:
This information is for general information purposes only. GoldenPi makes no guarantee on the accuracy of the data provided here; the information displayed is subject to change and is provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. Investments in the securities market are subject to market risks. Read all the offer-related documents carefully before investing.
Bonds or non-convertible debentures (NCDs) are regulated by the Securities and Exchange Board of India and other government authorities. GoldenPi Securities Private Limited is a registered debt broker and acts as a distributor and not as a manufacturer of the product.
