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 High Yield Bonds |
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Description
High Yield Bonds are issued by organizations that do not qualify for "investment grade" (BBB- or better) ratings by one of the leading credit rating agencies. True to their name, High Yield Bonds generally offer greater yields to compensate for a significant increase in credit risk. In addition to increased credit risk, High Yield Bonds are also subject to interest rate risk and liquidity risk that to some degree affect most fixed income products.
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Benefits
Enjoy a higher rate of current income from higher coupon payments.
High Yield Bonds offer you the potential for capital appreciation (increase in the bond's price) if, for example, the borrower's debt rating is upgraded due to improved earnings, mergers or acquisitions, positive industry developments, etc.
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Features
As a High Yield Bond holder, you have priority over common and preferred stock holders in the event of the liquidation of the issuer
You receive semi-annual interest payments and get your principal payment back at maturity.
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Related Products/Services
Bond Ladders
Callable Bonds
Certificate of Deposit
Corporate Bonds
Convertible Bonds
Revenue Bonds
Treasury STRIPS
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