AA Rated Bonds are High Safety Bonds. AA denotes the bond issuer's credit rating and is assigned by a credit rating agency like CRISIL, CARE, ICRA, etc. The credit rating agencies assess the financial strength of bond issuers to quantify their financial strength and ability to repay debts. AA bonds are riskier than AAA bonds (AAA has the highest credit rating) but safer than bonds rated A, BBB and lower.