Lesson 1 of 5 · 13 min
Market segments and who issues
Bond markets are sorted mainly by who issues (sector), how creditworthy they are, and how long the debt runs, and an issuer's credit quality largely decides which of those segments it can reach.
In short
- Three core dimensions: issuer type (sector), credit quality and time to maturity. Extra labels: geography, currency and ESG features.
- Unlike equity (one or two share classes), one issuer often has many debt instruments: loans, bonds, commercial paper, in several currencies.
- Maturity buckets: short-term (under 1 year), intermediate (1–10 years), long-term (over 10 years).
- Investment grade: BBB− (S&P) / Baa3 (Moody's) or higher. High yield (speculative, junk): BB+ / Ba1 or lower. Fallen angels were IG at issue and have since dropped.
- Developed-market sovereigns usually carry the top rating and are treated as 'default risk free'. Strong IG companies borrow unsecured across all maturities; HY companies rely mostly on secured bank debt and have no access to commercial paper.
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