A bond with a speculative credit rating of BB ( S&P) or BA (Moody's) or lower. Junk or high-yield bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poor's and Moody's Investor Services, provide the rating systems for companies' credit. Bloomberg Financial Dictionary
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Also known as a high yielding bond. Any bond which is not of investment grade. Dresdner Kleinwort Wasserstein financial glossary
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Bonds that are considered to be very risky.
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junk bond UK US noun [C] FINANCE, STOCK MARKET
► a bond that has a high risk that it will not be paid back, but that may possibly make a large profit: »
If companies issuing junk bonds default on payments, bondholders have little legal recourse to get their investment back.
»Many utility companies have seen their credit rating downgraded to junk bond status.
»a junk bond dealer/investor/financier
»junk bond funds/portfolios/holdings
Financial and business terms. 2012.