In finance, a high yield bond (non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below investment grade at the time of purchase. These bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make them attractive to investors.
Welcome to CWAnswers
CWAnswers is your guide to the sprawling world wide web. The directory aims to provide a useful guide made by users. You can share your knowledge as well - simply sign up and edit your first entry. For questions just contact the team at support - at - cwanswers.com.
Weblinks for Junk Bond
Top 10 for Junk Bond
Things about Junk Bond you find nowhere else.
Select content modules
Junk Bonds — Blogs, Pictures, and more on WordPress
... wrote 3 months ago: This should bode well for AFBIX, the inverse junk bond fund. ... Junk Bonds, Mortgages and Milken ... Junk Bonds Imploding — 5 comments ...wordpress.com/tag/junk-bonds/High-yield debt - Wikipedia, the free encyclopedia
Junk Bonds: Everything You Need to Know. High Yield Blog: includes more than 700 credit snapshot reports for free download ...en.wikipedia.org/wiki/High-yield_debtglobeandmail.com: Market Blog - Junk bonds tempt
The most authoritative news in Canada featuring articles from The Globe and Mail, breaking news coverage, ... the blog. The yield on U.S. junk bonds is ...www.theglobeandmail.com/servlet/story/RTGAM.20081031.WBmarke...Can Turtles Fly? A Contrarian Investing Blog: My next great strategic ...
... idea: junk bonds ... I'm thinking of making junk bonds one of my big strategic ... Historical junk bond default rates. Sunday Spectacle V. Apr ...can-turtles-fly.blogspot.com/2008/11/my-next-great-strategic...Calitics:: Junk Bonds
David Dayen :: Junk Bonds. Tags: bond market, credit rating, Budget, ... Bayne of Blog. Bear Flag Blue. CA Budget Bites. CA Progress Report. CA Majority Report ...calitics.com/showDiary.do?diaryId=7970In finance, a high yield bond (non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below investment grade at the time of purchase. These bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make them attractive to investors.
Flows and levels
Global issue of high yield bonds more than doubled in 2003 to nearly $146 billion in securities issued from less than $63 billion in 2002, although this is still less than the record of $150 billion in 1998. Issue is disproportionately centered in the U.S.A., although issuers in Europe, Asia and South Africa have recently turned to high yield debt in connection with refinancings and acquisitions. In 2006, European companies issued over €31 billion of high yield bonds.
Risk
The holder of any debt is subject to interest rate risk and credit risk, inflationary risk, currency risk, duration risk, convexity risk, repayment of principal risk, streaming income risk, liquidity risk, default risk, maturity risk, reinvestment risk, market risk, political risk, and taxation adjustment risk. Interest rate risk refers to the risk of the market value of a bond changing in value due to changes in the structure or level of interest rates or credit spreads or risk premiums. The credit risk of a high yield bond refers to the probability and probable loss upon a credit event (i.e., the obligor defaults on scheduled payments or files for bankruptcy, or the bond is restructured), or a credit quality change is issued by a rating agency including Fitch, Moody's, or Standard & Poors.
A credit rating agency attempts to describe the risk with a credit rating such as AAA. In North America, the five major agencies are Standard and Poor's, Moody's, Fitch Ratings, Dominion Bond Rating Service and A.M. Best. Bonds in other countries may be rated by US rating agencies or by local credit rating agencies. Rating scales vary; the most popular scale uses (in order of increasing risk) ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, with the additional rating D for debt already in arrears. Government bonds and bonds issued by government sponsored enterprises (GSE's) are often considered to be in a zero-risk category above AAA; and categories like AA and A may sometimes be split into finer subdivisions like "AA-" or "AA+".
Bonds rated BBB- and higher are called investment grade bonds. Bonds rated lower than investment grade on their date of issue are called speculative grade bonds, derisively referred to as "junk" bonds.
The lower-rated debt typically offers a higher yield, making speculative bonds attractive investment vehicles for certain types of financial portfolios and strategies. Many pension funds and other investors (banks, insurance companies), however, are prohibited in their by-laws from investing in bonds which have ratings below a particular level. As a result, the lower-rated securities have a different investor base than investment-grade bonds.
























