An AA-rated NCD will have a higher risk of default vs. a AAA-rated one. Whether that risk will materialise or not will depend on the future performance of the issuer and cannot be predicted in advance. The rating agency is supposed to continuously monitor the financial condition of the company for any changes. An investor in high-yield bonds is expected to: monitor the credit ratings of the bonds in their portfolio be able to recover in case the bond is downgraded It is therefore important to weigh the risk of default vs. the promise of higher returns.