junk bonds

Cultural  

1. Technically known as bonds of “less than investment grade,” they are short-term, high-yield bonds. They were widely used in the 1980s to finance mergers, especially hostile ones.

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Example Sentences

Some of Oracle’s debt, including a 10-year note sold in September, recently has been trading like junk bonds, and the cost to protect Oracle’s debt against defaults has surged.

From The Wall Street Journal

Within fixed income, investors can get 3% to 5% yields on municipals, 6% to 10% on junk bonds, 10%-plus on private credit loans held by business development companies, 6% yields on preferred stock, 5% yields on mortgage securities, and 3.5% to nearly 5% yields on Treasuries.

From Barron's

The gap for junk bonds is less than three points.

From Barron's

The $1 trillion of loans to private junk-grade companies often carry 10%-plus yields at a time when many public junk bonds yield just 7%.

From Barron's

Bond funds are clamoring for the deal because it delivers high returns, or yields, typical of junk bonds but with protections associated with investment-grade credit ratings.

From The Wall Street Journal