What is High Yield (Junk Bond)?

Question

Accepted Answer

High Yield Bonds, also known as Junk Bonds, are corporate debt securities rated below investment grade (e.g., BB+ or Ba1 by major credit rating agencies), which offer significantly higher interest rates to compensate investors for the elevated risk of issuer default. These non-investment-grade instruments are typically issued by companies with high debt loads or uncertain financial outlooks, serving as a critical source of capital for growth-stage or financially distressed firms.

High Yield (Junk Bond)

What is High Yield (Junk Bond)?

What distinguishes High Yield Bonds from investment-grade debt, and what are the historical risk and return metrics for this asset class?

How have the historical default rates and yield spreads of High Yield Bonds influenced investor strategy, and what are the current market trends?

How can investors gain exposure to High Yield Bonds, and what is the significance of subcategories like "Fallen Angels" and "Rising Stars"?

Why are High Yield Bonds and corporate debt considered prime candidates for Real-World Asset (RWA) tokenization, and what is the projected market impact of tokenized debt?

Learn More