high-yield bond

(redirected from Speculative-Grade Bonds)
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Synonyms for high-yield bond

a (speculative) bond with a credit rating of BB or lower

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References in periodicals archive ?
Table 1 displays aggregate statistics on speculative bond issues and total speculative debt outstanding, including average coupon rates for new issues and average coupon rates for all outstanding speculative-grade bonds in our sample, for the period 1982-1994.
First, we estimated annual default rates in the traditional manner by dividing yearly par values for all speculative-grade defaulting bonds by the total par value of speculative-grade bonds outstanding in each year, where annual bond default rates are market-weighted to reflect the changing size of the speculative bond market when determining an overall average default rate.
Some earlier studies observed a significant difference between actual default losses to investors and original-issue coupon risk premiums paid on speculative-grade bonds.
This confidence interval indicates potential variability in yearly losses and may be used to measure the likelihood that losses in a given year will exceed the average yield premium on speculative-grade bonds.
Thus, the annual fixed-coupon or yield premium, as determined by the difference between speculative-grade bonds and Aaa or Treasury bonds on the date of issue, must include all possible contingencies, from the investor's perspective.
42 billion of the speculative-grade bonds that defaulted over the 13-year period of 1982 through 1994.
Call options on corporate bonds are now mostly observed on speculative-grade bonds and on long-term investment-grade bonds (e.
In our sample, speculative-grade bonds are almost exclusively 7 to 12 years in maturity, most are callable, and none has a maturity over 20 years.
Among callable speculative-grade bonds, 93% have a first call date three or five years after issuance.
Given the typical maturities and call dates of riskier bonds, call option values on speculative-grade bonds are unlikely to surpass those of high-grade bonds unless the lower-tier issuers set sharply lower call prices.
The differences between investment-grade and speculative-grade bonds are even more striking when the data are disaggregated by maturity.
In addition, many new offerings of speculative-grade bonds have been convertible into equity or have included equity-like features, such as warrants.