Questions tagged [junk-bonds]
A junk bond (high-yield bond, or non-investment-grade bond) is a bond that is rated below investment grade. These bonds have a higher risk of default or adverse credit events, but they offer higher yields than investment-grade bonds.
11
questions
1
vote
2
answers
79
views
Impact of rising interest rates on default risk of existing junk bonds?
When interest rates rise, we all know that Math shows that the value of a bond will drop, but that's not my question.
Intuition says that there's an indirect risk, in that rising rates might hurt ...
- 50.8k
2
votes
2
answers
62
views
Dividend amounts -- not just yield -- from my bond fund decreased over the past 18 months
Why?
I'm not questioning the yield percentage, which I know has dropped; it's the dollar amounts that puzzle me. I'd have expected the price of VWEAX to have risen (it's increased 1.71% in that time ...
- 50.8k
0
votes
1
answer
141
views
Can companies deliberately cause their bonds to be downgraded to junk status in order to reduce repayment?
Suppose a company decides to issue bonds at $1000 par value with $50 annual coupon (5% yield). Suppose these bonds were considered "investment grade" when issued. Suppose the company ...
- 17.2k
0
votes
1
answer
52
views
How's buying corporate junk bonds buying equities by proxy? [closed]
Is this r/wallstreetbets comment correct? If so, please expound?
Buying corporate junk bonds is by proxy buying equities. Before someone goes on a tangent, this is cause and effect.
user10763
1
vote
0
answers
48
views
Why did US junk bond funds fall from mid 2014 thru early 2016?
The Federal Funds rate was 0% the whole time, and the Prime rate stayed at 3.75%, so it seems that investor fear was the cause.
What caused them to be afraid?
Here shows how two big junk bond ETFs ...
- 50.8k
4
votes
1
answer
364
views
Bonds near maturity better than 3-month CDs? Need help explaining Bond stats
I have a ton of money in a checking account earning 0% interest. I thought about buying 3-month CDs with 2.25% interest (or 0.56% per 3 months), something short term so my money isn't locked up for ...
- 53
2
votes
2
answers
338
views
Which spot Treasury bond is used to calculate this high-yield spread?
The link below shows the BofA Merrill Lynch US High Yield Option-Adjusted Spread. I am trying to have a better understanding of high-yield bonds before I invest in them.
https://fred.stlouisfed.org/...
- 2,175
2
votes
3
answers
216
views
Are junk bonds advisable to be inside a bond portfolio that has the objective of generating stable income for a retiree?
Suppose a person has retired. He would like to construct a bond portfolio that generates stable income for his remaining days. Is it advisable to include junk bonds in the bond portfolio for that ...
- 2,175
4
votes
2
answers
1k
views
What is the risk to a high-yield corporate bond fund versus an investment-grade corporate bond fund?
The yield for HYG, a high-yield (i.e. junk) corporate bond ETF, is currently 5.72% versus 3.56% for LQD, an investment-grade corporate bond ETF. Of course, higher yield generally means higher risk. ...
- 16.1k
2
votes
2
answers
202
views
Where can I find information on corporate bonds (especially those rated as "junk") ?
I've been searching a number of financial sites and I can't seem to find a way to browse for companies that are selling bonds, and what rates/durations those bonds are at. How does one go about ...
- 539
10
votes
3
answers
469
views
What is a "Junk Bond"?
I was reading Barbarians at the Gate and I read that junk bonds were required to do large leveraged buyouts. What is a junk bond and how does it differ from a regular bond? Why is there higher risk/...
- 255