Rated and Listed Bonds are historically popular in times of recession, economic and market uncertainty, due to their fixed income as opposed to the ROI fluctuations seen in the stock and property markets. One of the first things fixed income investors typically do, is determine the category and profile of a bond. Is it an officially Registered and Listed Security ie does it have an ISIN? Does it sit on a major exchange? Are there annual cash redemption options, or are you locked in until maturity? Is it registered with/available on Euroclear/CREST? Different types of bonds are likely to appeal to different people. Risk and Liquidity play a major role in this. 

Someone perhaps, who has a long investment time horizon to recoup any capital losses, might include high risk minibonds or unlisted junk bonds in their portfolio. Conversely, Listed Bonds and investment grade bonds may find favour with a more astute, experienced professional investor, who prioritises capital preservation as paramount.

One way investors can generally assess the risk profile of a bond is through its Rating; with much of the detailed research carried out by external credit rating agencies who assign different credit ratings, based on how much risk is attached to the repayment of capital and liquidity.

The dividing line being: bonds with high credit ratings of at least BBB– are classified as investment grade (default rates less than 0.5% on average), while those below BBB– , are commonly referred to as junk or mini-bonds (default rates as high as 60%)