Explanation

Moody's credit rating scale for investment grade bonds:

Investment Grade (from highest to lowest):

• Aaa
• Aa1, Aa2, Aa3
• A1, A2, A3
• Baa1, Baa2, Baa3 (lowest investment grade)

Non-Investment Grade (Speculative Grade):

• Ba1, Ba2, Ba3
• B1, B2, B3
• Caa1, Caa2, Caa3
• Ca
• C

Therefore, Baa3 is the lowest tier of investment grade credit rating by Moody's. Ba1 and Ba3 are speculative/non-investment grade ratings.