Definitions for junk bond
This page provides all possible meanings and translations of the word junk bond
Random House Webster's College Dictionary
a corporate bond with a low rating and a high yield, often involving high risk.
Origin of junk bond:
junk bond, high-yield bond(noun)
a (speculative) bond with a credit rating of BB or lower; issued for leveraged buyouts and other takeovers by companies with questionable credit
A bond (an instrument of debt) which is considered below "investment grade" due to a significant risk of default by the issuer. The interest rate is higher in order to compensate holders for that risk.
In finance, a high-yield bond is a bond that is rated below investment grade. 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.
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