junk bond (Meaning)
junk bond (n)
a (speculative) bond with a credit rating of BB or lower; issued for leveraged buyouts and other takeovers by companies with questionable credit
Synonyms & Antonyms of junk bond
No Synonyms and anytonyms found
junk bond Sentence Examples
- Investors seeking higher returns often turn to junk bonds, despite their higher risk profile.
- Junk bonds, also known as high-yield bonds, carry a lower credit rating and typically pay higher interest rates.
- Companies with limited access to traditional financing may issue junk bonds to fund their operations.
- The demand for junk bonds increased during the dot-com boom, leading to a surge in issuance.
- The risk of default on junk bonds is significant, especially during economic downturns.
- Investors should carefully consider their risk tolerance before investing in junk bonds.
- Junk bonds can play a role in diversifying an investment portfolio, but overweighting them can increase overall risk.
- Credit rating agencies play a crucial role in assessing the risk of junk bonds and assigning credit ratings.
- The yield spread between junk bonds and investment-grade bonds provides an indication of the perceived risk premium.
- Junk bonds have become a significant component of the fixed-income market, attracting both institutional and individual investors.
FAQs About the word junk bond
a (speculative) bond with a credit rating of BB or lower; issued for leveraged buyouts and other takeovers by companies with questionable credit
No synonyms found.
No antonyms found.
Investors seeking higher returns often turn to junk bonds, despite their higher risk profile.
Junk bonds, also known as high-yield bonds, carry a lower credit rating and typically pay higher interest rates.
Companies with limited access to traditional financing may issue junk bonds to fund their operations.
The demand for junk bonds increased during the dot-com boom, leading to a surge in issuance.
