junk bond meaning

  "junk bond" in a sentence
Noun: junk bond
  1. A (speculative) bond with a credit rating of BB or lower; issued for leveraged buyouts and other takeovers by companies with questionable credit
    - high-yield bond

Derived forms: junk bonds

Type of: bond, bond certificate

Encyclopedia: Junk bond


[American slang]
n. a low-rated corporate bond that pays higher interest because of greater risk.
• Don't put all your money into junk bonds.
• Junk bonds pay a lot of interest.


[Business]
noun [C]

(Finance )

a type of bond that pays a high rate of interest because there is a lot of risk involved, often used if a company wants to raise money quickly in order to buy the shares of another company:

The company plans to sell $925 million of junk bonds to fund the acquisition.

investing in high-yield junk bonds

a junk bond fund

(= that invests money in these bonds)


[Economics]
A bond that offers a high rate of interest because it carries a higher than usual probability of default. The issuing of junk bonds to finance the takeover of large companies in the USA is a practice that developed in the 1970s and subsequently spread elsewhere.

See:

leveraged buy-out.


[Finance]
A bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower. Junk or high-yield bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poors and Moody's Investor Services, provide the rating systems for companies' credit.

Examples

More:   Next
  1. leveraged buy-outs and junk bonds
  2. junk bonds : a fin
  3. michael milken will always be synonymous with the term ” junk bond king
  4. junk bond status
  5. in the heady days of the 1980s, leveraged buy-outs relied on junk bonds

Related Words

  1. juniperus sabina meaning
  2. juniperus silicicola meaning
  3. juniperus virginiana meaning
  4. junk meaning
  5. junk basket meaning
  6. junk bonds meaning
  7. junk dna meaning
  8. junk dnas meaning
  9. junk e-mail meaning
  10. junk fax meaning
PC Version