High-yield Bond (Noun)
Meaning
A (speculative) bond with a credit rating of BB or lower; issued for leveraged buyouts and other takeovers by companies with questionable credit.
Classification
Nouns denoting possession and transfer of possession.
Examples
- Investors are often attracted to high-yield bonds due to their potential for higher returns, but they also come with a higher level of risk.
- The company's decision to issue a high-yield bond to finance its leveraged buyout raised concerns among analysts about its ability to meet its debt obligations.
- High-yield bonds are often referred to as "junk bonds" because of their lower credit ratings and higher default risk.
- The investment firm specialized in high-yield bonds and other distressed debt securities, looking for opportunities to buy them at discounted prices.
- As interest rates rose, the value of the high-yield bond portfolio declined, causing investors to lose money.