junk bond

Interest rates on investment-grade and junk bonds have continued to fall by the day .

Investors might be tempted by the fat yields on so-called junk bonds, issued by companies with credit ratings below BBB.

As a graduate business student at Pennsylvania's Wharton School, Milken made junk bonds a focus of his scholarship.

Buyout firms borrow through banks and by issuing junk bonds (in the name of the companies they're acquiring, of course).

And junk bonds haven't had much of a rebound in recent weeks even when stocks managed to rise, troubling some investors.

Case in point: A diversified portfolio of U. S. junk bonds yields more than 20% a year.

But appetite for riskier debt, such as junk bonds and asset-backed securities, remained far from what it was one year ago.

Investor interest in junk bonds rebounded sharply last month as strong returns from the sector fuelled a sharp increase in issuance.

In the meantime, the European Central Bank will buy junk bonds from Italy without limit, for as long as it takes.

Dealogic, the data provider, said junk bonds sold to US investors so far in 2010 reached $168bn last week.

Even 'junk' bonds, which have been pounded lately, could be attractive.

Junk bonds have only existed in a world of extended business cycles, coinciding with the debt supercycle of the past two decades.

Over the year to the end of October, only 2. 9% of American junk bonds had defaulted, according to Standard & Poor's (S&P), a rating agency.

But apparently what China's next wave of economic reform really needs is leveraged buyouts and high-yield - i. e. , junk - bonds.

Several banks had apparently balked at the deal, which was to be partly financed through junk bonds.

Others are focused on a downturn in junk bonds and sudden weakness in shares of steel and mining and companies.

Almost every asset has increased in price, including art, emerging-market shares, junk bonds and property.

Yet, with a 20% average yield, junk bonds could provide nice returns, even in that scenario.

Some financial institutions have rules prohibiting them from investing in "junk" bonds.

Existing high-yield "junk" bonds will fall to zero, and new ones will no longer be issued.

Last week, prices on high-yield, or junk, bonds, hit their highest level since 2007, nearly double their lows of the credit crisis.

These companies will be considered junk bonds once they are delisted, a lawyer told the National Business Daily.

Insurance companies, mutual funds, and savings and loan banks were other major buyers of junk bonds.

The yield gap between junk bonds and Treasury debt is at its smallest since 2007.

Junk bonds are also known as high-yield bonds.

Nine months into the year, companies have sold $172 billion in junk bonds, already an annual record, according to data provider Dealogic.

Another route: rental properties, which can pull in yearly income that rivals junk bonds.

On August 16th the Fed reported that banks had eased lending standards for small businesses; sales of junk bonds are rocketing.

Risky U. S. companies have to pay more to sell junk bonds.

Take junk bonds, whose use Michael Milken pioneered in the nineteen-eighties.

By late March of 2009, Citigroup shares had tripled, and Mr. Tepper's other holdings, including junk bonds, were rising.

The effect could be even more dramatic on one of the newest asset classes: junk bonds.

Junk bonds have performed well during periods of rising rates.

At the same time, junk bonds have been under pressure for weeks, a possible sign of trouble for companies laden with debt.

The authors note that risky debt was popular in the 1920s, then all but disappeared until the 1970s brought junk bonds.

Junk bonds, once despised, are now mainstream.

S& P defines weakest links as borrowers with junk bonds with ratings of B minus or lower and at risk of further downgrades.

Other funds also are selling junk bonds and loans of companies.

While the market for junk bonds may be showing that a contraction is a foregone conclusion, Wall Street economists say otherwise.

Michael Milken peddled junk bonds.

Rising interest rates typically hurt all kinds of bonds, and strategists have said demand for junk bonds could wane once rates start rising.

In the heady days of the 1980s, leveraged buy-outs relied on junk bonds.

A rally at the end of 2009 in junk bonds showed no signs of abating.

Junk bonds aren't a screaming bargain these days.

In July, global sales of new junk bonds reached $26bn, according to Dealogic.

As such, they are often called the junk bonds of the '90s.

Both junk bonds and emerging market bond sales have reached record levels in the past two years, for example.

Mr Fermon said junk bonds would lose 31pc of their value in 2010 alone.

Investors have felt sufficiently flush with cash to buy high-risk assets, such as junk bonds or commodity futures.

Unrelenting declines in corporate 'junk' bonds have pushed yields on these riskier securities to over 20% on average, a record.

Junk Bonds: A Financial Means With a Bright Future for Business Venturing

Investing in Junk Bonds: Inside the High Yield Debt Market by Edward I. Altman, Scott A. Nammacher

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