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The AA+ is the second-highest credit rating (one notch below AAA) assigned to long-term bond instruments with maturity exceeding 1 year. These ratings are assigned by leading agencies like CRISIL, ICRA, Fitch, and more.
AA+ rated bonds are usually issued by financially strong companies and PSUs. It represents low default risk and a very strong ability to service debt obligations. For your reference, 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+ Rated Bonds?
AA+ bonds are issued by companies or governments that are financially very strong but not at the absolute top level (which is AAA). A credit rating agency like CRISIL or ICRA gives this rating after checking how capable the issuer is of paying back its debt on time.
Usually, an AA+ rating means the issuer has:
- Stable income
- Good cash reserves
- High profitability
- A low chance of missing payments
These bonds are considered safe for investors, though they carry slightly more risk than AAA bonds. Because of this extra risk, they usually offer a higher return than AAA bonds.
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How are AA+ Bonds Rated?
AA+ bonds receive their rating after a detailed evaluation process carried out by a credit rating agency. To understand this process, let’s see how this assessment is made step-by-step:
Step I: Signing Agreement
The process begins when the company (or “rated entity”) signs a formal agreement with a credit rating agency. This agreement defines:
- The instrument to be rated (for example, a bond issue)
- The amount
- The fees for the service
Next, the agency assigns the case to a team of analysts after checking for any conflict of interest. The analysts request detailed financial and business information from the company.
Step II: Initiation of Scrutiny
Analysts carefully study the company’s data and visit its offices or plants (if needed). They also interact with management, bankers, and auditors. Based on this, a “rating report” is prepared in which the team explains the company’s:
- Financial strength
- Risks
- Ability to repay its obligations
This report is then presented to a Rating Committee (RC).
Step III: Rating Assignment
The RC reviews all information and discusses the findings. When satisfied, it assigns a rating, such as AA+. The final rating and its reasoning (rating rationale) are shared with the company.
Step IV: Acceptance or Review
If the company accepts the rating, the agency publishes it on its website, along with an outlook (Stable, Positive, or Negative) and rationale. If it disagrees, it can request a review, and then the agency reassesses the case.
However, if the company does not accept the rating altogether, the rating is still disclosed as “unaccepted.”
What is the Latest AA Bond Yield?
As mentioned before, AA+ bonds carry a slightly higher risk compared to AAA-rated bonds. To compensate investors for this additional risk, they usually offer better returns.
As of September 15, 2025, the yield on AA-rated bonds can go up to 10.50% per annum, whereas AAA bonds usually offer returns in the range of 6% to 8% per annum.
3 Major Benefits of Investing in AA+ Bonds
The AA+ rating is just second to the best in class AAA label. It represents companies with strong financial position, cash flows, and repayment records. That reduces the probability of missed interest or principal payments compared with lower-rated debt.
Thus, as an investor, if you are prioritising capital safety, AA+ bonds may provide a reasonable balance between capital safety and competitive returns. Some more benefits of AA+ rated bonds you may consider are:
1. You Earn Contractually Fixed Income
Like all debentures, AA+ bonds also pay interest as per their coupon rate. The payouts are non-market-linked and flexible. You can choose to receive interest:
- Monthly
- Quarterly
- Half-yearly
- Annually
At maturity, you are returned your principal amount. However, be aware that in the case of “callable bonds”, the issuer has the right to redeem the bonds even before maturity.
2. You Can Diversify Your Portfolio with Series AA Bonds
Adding AA+ debentures to your portfolio reduces concentration in equities and interest-rate-sensitive instruments. Be aware that credit performance (such as bond repayments and interest) behaves differently from the stock market.
That’s because it depends on the issuer’s financial strength and doesn’t fluctuate with market trends. Even if the stock market falls, AA+ bonds can continue paying interest + return principal on time. In this way, AA+ bonds can lower your overall portfolio volatility.
3. You Can Use AA+ Bonds for Laddering Strategies
Laddering is a method to manage investment risk and cash flow by buying bonds with different maturity dates. Let’s see how you can practice it:
- Instead of investing all money in one bond, split it across multiple AA+ bonds with staggered maturities (say, 1 year, 3 years, 5 years)
- Now, as each bond matures, you get your principal back.
- You can either reinvest it in new bonds or use it as needed.
Okay, but what is the benefit? Such a laddering approach:
- Reduces the risk of locking all money at one interest rate.
- Gives you regular cash inflows from maturing bonds.
- Allows you to manage interest rate changes over time better.
So, AA+ Bonds Are Just a Notch Below AAA, But Offer Better Returns!
Till now, you must have understood that AA+ is the second-highest rating (just below the AAA label). They carry a slightly higher risk than AAA-rated bonds, and to compensate investors, they offer premium or bonus returns.
Their yields are usually higher than AAA bonds, which makes them attractive for low to medium-risk investors. Some key benefits you may realise by investing in AA+ rated bonds are:
- Guaranteed fixed income with regular payouts
- Diversified portfolio
- Volatility dampening
- Practice the laddering strategy
If you are looking to invest in AA+ or AAA bonds online, you may consider using the GoldenPi platform. The entire process is 100% digital and can be completed within a few minutes.
AA+ Rated Bonds FAQs
What is the difference between coupon rate and yield?
The primary difference between coupon rate and yield is that coupon rate is fixed on the face value and determines periodic cash payments. In contrast, yield (also called “yield to maturity”) is the total return you earn if you buy at the current market price and hold to maturity.
Can I buy AA+ bonds at less than their face value?
Yes, when you are buying from the secondary market, you can buy a bond:
- At par (price = face value)
- At a discount (price < face value)
- At a premium (price > face value)
Please note that the market price depends on current interest rates and credit conditions.
What is the “+” sign in AA+ rating?
The “+” sign in AA+ is the modifier, which indicates that the bond is at the higher end of the AA rating category. It shows that the issuer is stronger than a plain AA-rated entity but not as strong as AAA.
Does AA+ Bond Offer Higher Returns Than AAA Bonds?
AA+ bonds usually offer higher yields than AAA issues. This premium or spread compensates investors for “incremental credit exposure”.
If you cannot accept the lowest possible yield (as offered by AAA bonds) but do not want to assume high credit risk, AA+ bonds can provide a good “return-per-risk” trade-off.
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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.
