This page compiles investment grade bond statistics from primary sources: daily ICE BofA index yields and spreads and Treasury yields from the Federal Reserve Bank of St. Louis (FRED), S&P Global Ratings’ long-run default study, index returns reported in fund prospectuses filed with the SEC, and InvestmentGrade.com’s own data on net lease listings and tenant ratings. Market figures update each business day; dated figures show their date. Investment grade means a rating of BBB‑ or higher from S&P or Fitch, or Baa3 or higher from Moody’s; see the investment grade guide.
Key Statistics
- Yield: the ICE BofA US Corporate Index effective yield was 5.99% as of October 1, 2026, +121 bps from a year earlier (FRED BAMLC0A0CMEY).
- Spread: the index option-adjusted spread was 86 bps, against a range of 73 bps to 133 bps since October 3, 2023 (FRED BAMLC0A0CM).
- High yield: the ICE BofA US High Yield Index spread was 324 bps, 238 bps wider than investment grade (FRED BAMLH0A0HYM2).
- Rating gap: BBB bonds yield 35 bps more than A-rated bonds.
- Treasuries: the 10-year Treasury yield was 5.24% (FRED DGS10).
- Defaults: S&P’s average one-year default rate for investment grade issuers was 0.08%, against 3.54% for speculative grade (1981 to 2024).
- Bond vs. net lease: the median asking cap rate on Dollar General listings is 7.00% against a BBB index yield of 6.19%, a spread of +81 bps.
Bond statistics are the starting point. The spread is the opportunity.
If credit-comparable net lease real estate can price wider than the bond market, the question is whether direct ownership offers better income, control, tax treatment, and exit options for the same tenant, once property risk, illiquidity, and the lease obligor are accounted for.
Compare the spread: what the bond-to-NNN spread means.
Study the tenant: the tenant ratings database.
Deploy through a 1031: see how a 1031 replacement-property strategy changes the after-tax comparison.
Ask Investment Grade to help find, fund, exchange, or exit NNN real estate
Yields and Spreads by Rating Category
Effective yields and option-adjusted spreads for each rating category, with the range each spread has covered over FRED’s published history:
| Index (rating category) | Effective yield | Option-adjusted spread | Spread range since history start |
|---|---|---|---|
| AAA | 5.81% | 42 bps | 27 to 59 bps (low Aug 15, 2025; high Apr 7, 2025) |
| AA | 5.80% | 61 bps | 41 to 73 bps (low Aug 18, 2025; high Apr 7, 2025) |
| A | 5.84% | 73 bps | 59 to 115 bps (low Jan 22, 2026; high Oct 20, 2023) |
| BBB | 6.19% | 106 bps | 92 to 163 bps (low May 29, 2026; high Oct 20, 2023) |
| Investment grade composite | 5.99% | 86 bps | 73 to 133 bps (low Jan 22, 2026; high Oct 20, 2023) |
| BB | 7.03% | 204 bps | 150 to 311 bps (low Aug 28, 2026; high Oct 20, 2023) |
| Single-B | 8.27% | 329 bps | 254 to 486 bps (low Nov 14, 2024; high Apr 7, 2025) |
| CCC and lower | 17.02% | 1215 bps | 690 to 1215 bps (low Jan 23, 2025; high Oct 1, 2026) |
| High yield composite | 8.22% | 324 bps | 259 to 461 bps (low Jan 22, 2025; high Apr 7, 2025) |
ICE BofA US Corporate (AAA to BBB) and US High Yield (BB to CCC) index effective yields and option-adjusted spreads, from the Federal Reserve Bank of St. Louis (FRED), as of October 1, 2026. The range covers the daily history FRED currently publishes for these series, which begins October 3, 2023. Updated each business day.
Yields by Maturity
| Maturity (ICE BofA US Corporate index) | Effective yield | Option-adjusted spread |
|---|---|---|
| 1 to 3 years | 5.34% | 58 bps |
| 3 to 5 years | 5.74% | 77 bps |
| 5 to 7 years | 5.94% | 89 bps |
| 7 to 10 years | 6.19% | 105 bps |
| 10 to 15 years | 6.38% | 102 bps |
| 15 years and longer | 6.65% | 103 bps |
ICE BofA US Corporate index maturity sub-indexes, effective yield and option-adjusted spread, from the Federal Reserve Bank of St. Louis (FRED), as of October 1, 2026. For reference, the 10-year Treasury yield was 5.24% on October 1, 2026. Updated each business day.
Longer maturities carry more interest rate risk; see bond duration.
Rates and Inflation Expectations
| Measure | Latest | A year earlier | Change |
|---|---|---|---|
| Effective federal funds rate | 3.88% | 4.09% | −21 bps |
| 2-year Treasury yield | 4.78% | 3.55% | +123 bps |
| 10-year Treasury yield | 5.24% | 4.12% | +112 bps |
| 30-year Treasury yield | 5.61% | 4.72% | +89 bps |
| 10-year breakeven inflation rate | 2.36% | 2.34% | +2 bps |
| ICE BofA US Corporate Index effective yield | 5.99% | 4.78% | +121 bps |
Federal Reserve Bank of St. Louis (FRED): effective federal funds rate (DFF), Treasury constant maturity yields (DGS2, DGS10, DGS30), 10-year breakeven inflation (T10YIE), and ICE BofA US Corporate Index effective yield, latest observations as of October 1, 2026, compared with the nearest observation one year earlier. Updated each business day.
The Top of the Rating Scale
Two U.S. companies hold AAA ratings from S&P: Microsoft and Johnson & Johnson. At Moody’s, Microsoft, Johnson & Johnson, and Apple are rated Aaa; Moody’s upgraded Apple to Aaa on December 21, 2021, and S&P rates Apple AA+. Moody’s downgrade of the United States from Aaa to Aa1 on May 16, 2025 removed U.S. Treasury debt from its Aaa category; it did not change which corporations are rated Aaa. S&P has rated the United States AA+ since 2011 and Fitch since 2023.
Default Rates
| Rating group (S&P, global corporates) | 1-year average default rate | 5-year cumulative | 10-year cumulative |
|---|---|---|---|
| AAA | 0.00% | 0.34% | 0.67% |
| AA | 0.02% | 0.28% | 0.65% |
| A | 0.05% | 0.39% | 1.03% |
| BBB | 0.14% | 1.36% | 2.86% |
| BB | 0.56% | 5.75% | 10.44% |
| B | 2.93% | 15.60% | 22.02% |
| CCC/C | 26.12% | 46.53% | 50.43% |
| Investment grade | 0.08% | 0.77% | 1.69% |
| Speculative grade | 3.54% | 13.64% | 19.15% |
Source: S&P Global Ratings, “Default, Transition, and Recovery: 2024 Annual Global Corporate Default And Rating Transition Study,” March 27, 2025, table 24 (1981 to 2024).
In 2024, S&P upgraded 9.6% of global corporate issuers and downgraded 5.8%; of the 130 defaulters rated at the start of the year, 97 were rated CCC/C.
Index Returns
| Index (average annual total return, periods ended December 31, 2025) | 1 year | 5 years | 10 years |
|---|---|---|---|
| Bloomberg US Corporate Index | 7.77% | −0.09% | 3.27% |
| Bloomberg US Corporate High Yield Index | 8.62% | 4.51% | 6.53% |
| Bloomberg US Aggregate Bond Index | 7.30% | −0.36% | 2.01% |
Sources: index returns as reported in summary prospectuses filed with the SEC in 2026 (Morgan Stanley Institutional Fund Trust and Hartford Mutual Funds for the Bloomberg US Corporate Index; Guggenheim/Security Investors and Angel Oak for the High Yield and Aggregate indexes). Index returns reflect no fees or expenses.
The Bloomberg US Corporate Index lost about 15.8% in calendar 2022 as interest rates rose.
Major Investment Grade Bond ETFs
Fund assets, yields, and durations change daily; compare them on the sponsors’ sites as of the same date. AGG and BND, which hold the broad taxable bond market, are much larger than any corporate-only fund. See corporate bond ETFs compared.
| Ticker | Fund | Index tracked |
|---|---|---|
| LQD | iShares iBoxx $ Investment Grade Corporate Bond ETF | Markit iBoxx USD Liquid Investment Grade Index |
| VCIT | Vanguard Intermediate-Term Corporate Bond ETF | Bloomberg U.S. 5-10 Year Corporate Bond Index |
| VCSH | Vanguard Short-Term Corporate Bond ETF | Bloomberg U.S. 1-5 Year Corporate Bond Index |
| IGSB | iShares 1-5 Year Investment Grade Corporate Bond ETF | ICE BofA 1-5 Year US Corporate Index |
| VCLT | Vanguard Long-Term Corporate Bond ETF | Bloomberg U.S. 10+ Year Corporate Bond Index |
| AGG | iShares Core U.S. Aggregate Bond ETF | Bloomberg U.S. Aggregate Bond Index |
| BND | Vanguard Total Bond Market ETF | Bloomberg U.S. Aggregate Float Adjusted Index |
The Bond vs. Net Lease Real Estate Spread
The table compares the bond index yield for each tenant’s rating category with the median asking cap rate on its active listings. A tenant’s rating applies to a lease only if the rated company signs or guarantees it.
| Tenant | S&P / Moody’s | Index yield (category) | Median asking cap rate (listings with a cap rate) | Spread |
|---|---|---|---|---|
| Walmart Bonds vs. NNN analysis | AA / Aa2 | 5.80% (AA) | 5.25% (9) | −55 bps |
| JPMorgan Chase Bonds vs. NNN analysis | AA- / Aa2 | 5.80% (AA) | 5.00% (35) | −80 bps |
| 7-Eleven | A- / Baa2 | 5.84% (A) | 5.25% (155) | −59 bps |
| Dollar Tree Bonds vs. NNN analysis | BBB / n/a | 6.19% (BBB) | 7.25% (108) | +106 bps |
| Dollar General Bonds vs. NNN analysis | BBB / Baa3 | 6.19% (BBB) | 7.00% (572) | +81 bps |
| CVS Bonds vs. NNN analysis | BBB / Baa3 | 6.19% (BBB) | 6.50% (168) | +31 bps |
| Starbucks Bonds vs. NNN analysis | BBB+ / Baa1 | 6.19% (BBB) | 5.75% (137) | −44 bps |
| AutoZone Bonds vs. NNN analysis | BBB / Baa1 | 6.19% (BBB) | 5.50% (33) | −69 bps |
| McDonald's Bonds vs. NNN analysis | BBB+ / Baa1 | 6.19% (BBB) | 4.00% (47) | −219 bps |
Showing 9 tenants. Index yield is the ICE BofA effective yield index for the tenant’s rating category (US Corporate AAA, AA, A or BBB index; US High Yield BB, single-B or CCC and lower index), using the S&P rating, or the Moody’s equivalent where S&P does not rate, from the Federal Reserve Bank of St. Louis (FRED), as of October 1, 2026. It is an index average, not a quote on the company’s own bonds. Median asking cap rate is the median of asking cap rates on active listings InvestmentGrade.com tracks, as of October 8, 2026; asking cap rates are not closed-sale cap rates. Spread is the median asking cap rate minus the index yield. Ratings are corporate issuer ratings; the entity that signs or guarantees a given lease can differ, so confirm the lease obligor. Shaded rows are below investment grade. NR means the agency does not rate the entity; n/a means no verified rating is on file.
Asking cap rates grouped by tenant rating category:
| Tenant rating category (S&P, or Moody’s equivalent) | Median asking cap rate | Middle half of listings | Listings (tenants) |
|---|---|---|---|
| AA | 5.60% | 5.00% to 6.45% | 69 (5) |
| A | 5.25% | 5.00% to 6.00% | 287 (20) |
| BBB | 6.65% | 6.00% to 7.50% | 1,290 (27) |
| BB | 6.23% | 5.50% to 7.25% | 208 (17) |
| B | 6.00% | 5.50% to 6.75% | 235 (11) |
| Not publicly rated (private companies) | 6.80% | 5.35% to 8.25% | 963 (21) |
Active listings InvestmentGrade.com tracks with a published asking cap rate, as of October 8, 2026, grouped by the rating of tenants rated in their own name; franchised brands rated only through a parent company are left out because the parent usually does not stand behind franchisee leases. Asking cap rates are not closed-sale cap rates, and location, lease term, and ground lease structure move cap rates as much as the rating. Categories with fewer than 10 listings are not shown (CCC and lower).
The full table is on the bond-to-NNN spread page.
Frequently Asked Questions
What is the current investment grade credit spread?
As of October 1, 2026, the ICE BofA US Corporate Index option-adjusted spread was 86 bps (FRED BAMLC0A0CM), and the BBB index spread was 106 bps.
What do investment grade corporate bonds yield?
The ICE BofA US Corporate Index effective yield was 5.99% as of October 1, 2026. The high in FRED’s published history was 6.44% on October 19, 2023.
How often do investment grade bonds default?
Rarely. In S&P’s 1981 to 2024 study the average one-year default rate for investment grade issuers was 0.08%, and the ten-year cumulative rate 1.69%.
Which U.S. companies are rated AAA?
Microsoft and Johnson & Johnson at S&P. Moody’s rates Microsoft, Johnson & Johnson, and Apple Aaa.
Which is the largest investment grade corporate bond ETF?
Among corporate-only funds, the largest by assets are Vanguard’s intermediate fund (VCIT) and iShares’ LQD, with the ranking changing over time; check the sponsors’ current figures. Broad aggregate funds such as AGG and BND, which also hold Treasuries and mortgage-backed securities, are larger.
Does an investment grade index fund remove downgrade risk?
No. An index fund diversifies across many issuers, but it remains exposed to downgrades, defaults, and interest rate risk. Bonds that fall below investment grade leave the index, usually after their prices have already dropped.
Methodology and Sources
- Yields, spreads, Treasury yields, policy rate, and breakeven inflation: Federal Reserve Bank of St. Louis (FRED), ICE BofA index series and Treasury series, updated each business day. FRED currently publishes about three years of daily history for the ICE BofA series.
- Default rates and rating transitions: S&P Global Ratings, 2024 Annual Global Corporate Default And Rating Transition Study, March 27, 2025.
- Index returns: summary prospectuses filed with the SEC in 2026, as listed above.
- Net lease cap rates: median asking cap rates on active listings InvestmentGrade.com tracks; asking cap rates are not closed-sale cap rates.
- Tenant ratings: InvestmentGrade.com ratings database, compiled from agency rating actions and issuer filings, with the check date on each tenant page.
Educational content only. InvestmentGrade.com is a commercial real estate brokerage and educational publisher. We do not sell, broker, underwrite, or solicit any bonds, securities, or investment products. Yields, ratings, and prices referenced fluctuate continuously and are sourced from public market data as of the date noted. Nothing on this page constitutes investment advice, an offer to sell, or a solicitation to buy any security. Consult a licensed broker-dealer, registered investment advisor, or tax professional before making any investment decision. For SEC investor education, visit investor.gov.
