New Delhi, Aug. 12 -- Issuances of low-rated corporate bonds are on the rise. Corporate bonds rated BBB+, BBB and BBB-, the lowest tier of rating still considered investment-grade before slipping into junk status, have seen a surge in supply in recent quarters.

According to Prime Database, 450 such bonds were issued in the fiscal year ended March 2025, up from 244 in FY24, 120 in FY23 and 75 in FY22. There have been cases of covenant breaches and defaults as well.

Mint examines the risks of investing in these low-rated bonds and the safeguards available to investors.

Why are more low-rated bonds being offered now?

A growing number of lower-rated bonds are appearing on online bond providing platforms (OBPP), and many of these instrumen...