junk bond


junk bond
any corporate bond with a low rating and a high yield, often involving high risk.
[1975-80]

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Bond paying a high yield but also presenting greater risk than comparable securities.

Junk bonds can be identified through the lower grades assigned by rating services (e.g., BBB instead of AAA for the highest quality bonds). Because the possibility of default is great, junk bonds are usually considered too risky for investment by the large institutional investors (savings and loan associations, pension funds, insurance companies, and mutual funds) that provide U.S. corporations with much of their investment capital. Junk bonds are often issued by smaller, newer companies.

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Universalium. 2010.

Look at other dictionaries:

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  • junk bond — see bond 2 Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. junk bond …   Law dictionary

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  • junk bond — loc.s.m.inv. ES ingl. {{wmetafile0}} TS fin. titolo ad alto rischio e ad alto rendimento {{line}} {{/line}} DATA: 1987. ETIMO: comp. di junk spazzatura e bond titolo, obbligazione …   Dizionario italiano

  • junk bond — n a ↑bond which has a high risk and is often sold to pay for a ↑takeover …   Dictionary of contemporary English

  • junk bond — junk ,bond noun count BUSINESS a BOND that pays a lot of interest but has a high level of risk …   Usage of the words and phrases in modern English

  • junk bond — junk′ bond n. bus a corporate bond with a low rating and a high yield, often involving high risk • Etymology: 1975–80 …   From formal English to slang

  • junk bond — n. Informal a high yield, speculative BOND1 (n. 10), often issued to finance the takeover of a corporation …   English World dictionary

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  • Junk bond — A bond with a speculative credit rating of BB ( S&P) or Ba (Moody s) or lower is a junk or high yield bond. Such bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poors and Moody s investor… …   Financial and business terms


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