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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 by credit rating agencies. These bonds have a higher risk of default or other adverse credit events but offer higher yields than investment-grade bonds to compensate for the increased risk.
Michael Robert Milken (born July 4, 1946) is an American financier. He is known for his role in the development of the market for high-yield bonds ("junk bonds"), [2] and his conviction and sentence following a guilty plea on felony charges for violating U.S. securities laws. [3]
For Fitch, a bond is considered investment grade if its credit rating is BBB− or higher. Bonds rated BB+ and below are considered to be speculative grade, sometimes also referred to as "junk" bonds. [103] Fitch Ratings typically does not assign outlooks to sovereign ratings below B− (CCC and lower) or modifiers.
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Looking at rated bonds for 1973–89, the authors found a AAA-rated bond paid 43 "basis points" (or 43/100 of a percentage point) over a US Treasury bond (so that it would yield 3.43% if the Treasury yielded 3.00%). A CCC-rated "junk" (or speculative) bond, on the other hand, paid over 7% (724 basis points) more than a Treasury bond on average ...
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Junk bonds are a high-risk investment, but they offer the potential for higher returns than investment-grade bonds. Junk bonds, also known as high-yield bonds, are best suited for investors who ...
According to Robert Sobel, First Executive was involved in 90% of Drexel's underwritings, which accounted for about $40 billion in bonds from 1982 to 1987. After the State of California took over Executive Life, it sold the company's junk-bond portfolio to Altus Finance, a unit of Crédit Lyonnais , in November 1991 for $3.25 billion.