High-yield bond


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Related to High-yield bond: junk bond

High-yield bond

High-Yield Bond

A bond with a low rating. Bonds rated less than Baa3 by Moody's or BBB- by S&P or Fitch are considered high-yield bonds. They have higher yields because they have a higher risk of default on the part of the issuer. High-yield bonds are considered sufficiently high-risk that the law does not allow banks to invest in them. They are also called low-grade bonds, and, informally, junk bonds.

high-yield bond

See junk bond.

High-yield bond.

High-yield bonds are bonds whose ratings from independent rating services are below investment grade.

As a result, to attract investors, issuers of high-yield bonds must pay a higher rate of interest than the rates that issuers of higher-rated bonds with the same maturity are paying. The higher rate translates to more income, which is the higher yield.

High-yield bonds may also be described, somewhat more graphically, as junk bonds.

References in periodicals archive ?
High-yield bonds -- These typically comprise 20 to 40 percent of total funding and can command a wide range of interest rates but are normally 400 to 500 basis points over prime.
Faria, 1994, "A Note on the Shareholder Wealth Effects of High-Yield Bonds," Financial Management (Spring), 10.
Tradeweb, a leader in building and operating fixed income and derivatives markets, today announced that it is enhancing its rapidly-growing European credit platform with the addition of European high-yield bonds.
Time Period Average Percentage Return For High-Yield Bond Funds First Quarter 2003 4.
TOP 5 HIGH-YIELD BOND FUNDS 6-Month 1-Year Fund Name Total Return(*) Total Return Dreyfus High-Yield Securities 15.
A list of the five best and worst performing high-yield bond funds can be found at the bottom of this release.
13 /PRNewswire/ -- High-yield bonds could see better returns than other fixed income asset classes in 2004, though not as strong as 2003's 10-year magnitude rally, according to Pax World High-Yield Bond Fund (PAXHX) manager Diane Keefe.
The team specializes in the analysis and management of senior floating rate loans, high-yield bonds and the use of leverage to manage portfolios.
At inception, the investment manager targeted a portfolio of 50% to 70% high-yield bonds, 15% to 25% bank loans and the balance in mezzanine and special situations investments.
At inception, the investment manager targeted a portfolio of 50% to 70% high-yield bonds, 20% to 30% bank loans and the balance in mezzanine and special situations investments.
At inception, the investment manager targeted a portfolio of 40% high-yield bonds and loans, 30% distressed debt securities, 20% mezzanine investments, 10% equity securities.