junk bond

noun

Finance.

1. any corporate bond with a low rating and a high yield, often involving high risk.

junk bond

noun

1. finance a security that offers a high yield but often involves a high risk of default

Word History and Origins

Origin of junk bond¹

First recorded in 1975–80

Example Sentences

Another reason for investors’ apparent equanimity: The junk bond market is generally higher quality now than it used to be.

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As federal investigators closed in on Mr. Boesky, he agreed to cooperate, providing information that led to the downfall of the investment bank Drexel Burnham Lambert and its junk bond king, Michael Milken.

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Mr. Milken, once known as the “junk bond king” of Wall Street, was sentenced to 10 years in 1990 for securities fraud, tax fraud and other crimes.

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A few days later, Moody’s rating service downgraded the debt of the national oil company, Petroleos Mexicanos, or Pemex, even further into junk bond status.

Read more on Seattle Times

Even so, while the majority of junk bond maturing in 2023 did so successfully, another $73 billion are set to mature in the next 18 months, Morgan Stanley noted in a Friday report.

Read more on Reuters