The following factors may affect a bond rating:

Question

Quizplus · Accepted Answer

All three factors listed (security provisions, indenture provisions, and expected trends of industry operations) can potentially affect a bond rating. Security provisions are important because they determine the likelihood that bondholders will receive their principal and interest payments on time. Indenture provisions, which are the legal terms of the bond contract, can impact credit risk as well. Finally, expected trends of industry operations could impact the performance of the issuer and their ability to repay their debts.

The Following Factors May Affect a Bond Rating