Investor Glossary-junk bondInvestor Glossary-junk bondInvestor Glossary-junk bondInvestor Glossary-junk bondInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Junk Bond

The HTML to link to this page
 

A junk bond is any bond that is rated below investment grade (BB or lower) by Moody's or Standard & Poor's due to the high risk of default. A junk bond is also referred to as a high yield bond. Prior to 1977, every junk bond was a previously investment grade bond for a company that had saw its credit quality erode. In that year, Bear Stearns underwrote an original-issue bond that started with a junk rating. Drexel Burnham Lambert quickly followed suit with a series of junk bond issues for companies that had been locked out of the bond market. Michael Milkin, who is often referred to as the junk bond king, led the Drexel Burnham junk bond initiative. The junk bond market peaked in 1989, when it was depressed by a series of issuer defaults. Many corporate bond issues today are given junk bond, or high-yield status, and even blue chip stocks have seen their bonds rated junk.



Rate this junk bond definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: 144a, debt service coverage, Zero Cost Collar, per diem, FICO score, class C shares, in escrow, EBITDA, 401a, command economy, deferred revenue, current ratio, reverse mortgage, wholly-owned subsidiary, phantom income, dividends payable, annual return, stock split, balance sheet, APR, required rate of return, VIX, labor relations, LIBOR, FTSE, stock market close, 1035 exchange, real GDP, cancelled check, covered put, liquidity ratio, Key Rate Duration, diluted share, limit order, quality assurance, ex-dividend date, inflation, ex-dividend, average price per share, retained earnings, risk management, option premium, irrevocable trust, implied volatility, 1031 exchange, open position, margin rate, minority interest, deferred tax


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use