Sentences with phrase «bond with a lower credit»

A bond with a lower credit rating might offer a higher yield, but it also carries a greater risk that the issuer will not be able to keep its promises.

Because bonds with lower credit ratings typically compensate investors for the greater risk with higher yields, someone may cautiously choose to swap a higher - quality bond for a lower - quality bond to gain a greater return.

A quality swap is a type of swap where you are looking to move from a bond with a lower credit quality rating to one with a higher credit rating or vice versa.

High yield bonds are riskier bonds with lower credit ratings and higher yields than their safer counterparts.

Corporate bonds with low credit ratings are called high - yield bonds, because they have higher yields than investment grade bonds.

A high - risk, non-investment-grade bond with a low credit rating, usually BB or lower; as a consequence, it usually has a high yield.

Not exact matches

«If you're looking to get 4 % or 5 % you're not necessarily going to get that with bonds these days unless you're going to lower the credit quality.

debt obligations of the U.S. government that are issued at various intervals and with various maturities; revenue from these bonds is used to raise capital and / or refund outstanding debt; since Treasury securities are backed by the full faith and credit of the U.S. government, they are generally considered to be free from credit risk and thus typically carry lower yields than other securities; the interest paid by Treasuries is exempt from state and local tax, but is subject to federal taxes and may be subject to the federal Alternative Minimum Tax (AMT); U.S. Treasury securities include Treasury bills, Treasury notes, Treasury bonds, zero - coupon bonds, Treasury Inflation Protected Securities (TIPS), and Treasury Auctions

Its underlying index selects and weights its bonds by market value, and this method yields a portfolio that aligns well with our benchmark in terms of credit tranches and maturity buckets, with the only notable difference being a slightly lower YTM.

These ETFs typically hold bonds issued by companies with lower credit ratings.

Companies with excellent to low credit ratings issue investment - grade corporate bonds, which have lower interest rates because of the safety of the investment.

High - yield bonds are issued by corporations with lower credit quality ratings.

The result is a selection of bonds with higher volatility, lower credit quality, and higher yield than the broader high - yield market.

These bonds offer higher yields but are coupled with a higher risk of default, as signified by these companies» lower credit ratings.

And with the credit rating, she's hoping to get a lower rate on water bonds to hopefully lower water rates.

«Since the PSF backing became available under 2013 legislation, credit - worthy charter school operators have been able to refund previously issued bonds with the state guarantee, dramatically lowering their borrowing costs.»

Having a good credit history makes it possible for service providers to gauge how much of a risk you are, a good rating means more financial options and opportunities — this makes it possible to apply for a bigger bond with home loan providers at low interest rates, plus you can also get various other loans from other institutions at affordable rates.

An option could be to invest in an ETF with short term bonds (e.g. 1 year) with AAA credit rating (high quality, so very low default rate).

Higher Credit Quality, Lower Volatility and Comparable Yields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds providCredit Quality, Lower Volatility and Comparable Yields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds provideLower Volatility and Comparable Yields Preferreds have significantly higher credit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds providcredit quality than high yield bonds, have exhibited lower volatility and can offer similar yields with potential tax advantages on income as some preferreds providelower volatility and can offer similar yields with potential tax advantages on income as some preferreds provide QDI.

Higher - investment grade corporate bonds, such as those with «AAA» credit ratings, tend to have very low default risk.

Yield blindness or stated another way, the insatiable search for yield coupled with the low supply of higher yielding bonds has kept many weaker credits including Illinois from seeing higher spreads.

These bonds offer higher yields but are coupled with a higher risk of default, as signified by these companies» lower credit ratings.

High - yield bonds are issued by corporations with lower credit quality ratings.

AAA bonds carry lower yields than junk bonds much like the interest you get when lending to people with higher or lower credit ratings.

Note that margin is not extended for any bond with a Credit Rating below Investment Grade BBB -, Baa3, BBB (LOW)

Within each group, bonds were selected by credit spread and low volatility factors; bonds with Libor OAS wider than the median level of the group were ranked by yield volatility, and only the 20 % of those ranked bonds with the lowest volatility were then selected.

A bond with a credit rating of BBB / Baa or lower.

The subsequent low - volatility screening is designed so that bonds with less risk, as demonstrated by their trading pattern, are selected, while duration and credit rating are held equal.

Swapping for quality becomes especially attractive for investors who are concerned about a potential downturn within a specific market sector or the economy at large, as it could negatively impact bond holdings with lower credit ratings.

In low interest rate environments with narrow credit spreads, preferred stocks behave similarly to bonds.

For example, a plot of all bonds against a theoretical (usually zero coupon) yield curve show «rich» (overvalued) bonds with lower yields than bonds of similar credit and term, or «cheap» (undervalued) bonds with higher yields than bonds of similar credit and term.

«Emerging markets high - yield bonds are thus an attractive asset class for the long - term, offering a similarly high yield to US high - yield bonds, but with a lower duration and better credit rating.»

Higher levels of risk are generally associated with longer - term bonds when interest rates are currently low and deemed likely to go up in the future, as well as low credit quality bonds.

To form the quintile portfolios, we first ranked bonds within the investable sub-universe by each factor (credit spread and low volatility) and divided the universe into five groups, with higher values ranking higher (Quintile 1) for credit spread and lower values ranking higher (Quintile 1) for low volatility.

Companies with lower credit risk (higher credit rating) often enjoy a competitive advantage over their peers because higher rated companies can sell their bonds at a premium to lesser rated bonds.

I decided to write this article this night because I decided to run my bond momentum model — low and behold, it yelled at me that everyone is grabbing for yield through credit risk, predominantly corporate and emerging markets, with a special love for bank debt closed end funds.

For shorter duration bonds with high levels of credit risk, interest rates will not impact the value of these securities to the same degree as longer duration bonds with low levels of credit risk.

By selecting bonds with low MCR, the low volatility index keeps more credit exposure (long spread duration) for high - quality bonds (low OAS) and less credit exposure (short spread duration) for low - quality bonds (high OAS).

With these basics out of the way, we can proceed to rationally evaluate the return and risk of bond funds with all combinations of low, medium and high term risk, and low, medium and high credit risk, compared to the return and risk of a the directWith these basics out of the way, we can proceed to rationally evaluate the return and risk of bond funds with all combinations of low, medium and high term risk, and low, medium and high credit risk, compared to the return and risk of a the directwith all combinations of low, medium and high term risk, and low, medium and high credit risk, compared to the return and risk of a the direct CD.

Those were most evident, and most devastating, in bond funds, particularly those investing in riskier bonds — those with longer maturities and / or lower quality credits.

Relatively low liquidity with infrequent trading activity for many muni bonds places an importance on portfolio structure and credit quality.

Municipal bonds priced at a premium often provide the same return as par bonds that have the same credit quality and structure — with the added potential benefit of higher cash flows and lower market volatility.

Junk - bond issuers — those with low credit ratings — tend to sink or swim with the health of the economy.

The bonds of companies with the best credit ratings (typically designated «AAA») pay lower interest rates as a rule because investors will accept lower yields in return for reduced risk.

As with credit risk, uncertainty regarding bonds tends to result in lower prices and higher yields.

The S&P U.S. High Yield Low Volatility Corporate Bond Index (the HYLV index) was launched on Dec. 20, 2016, with the aim of capturing high yield bonds with less credit risk and lower return volatility than the broad investment universe of U.S. high yield bonds.

These issuers must pay a higher interest rate to attract investors to buy their bonds and to compensate them for the risks associated with investing in organizations of lower credit quality.

A balance must be struck between limiting risk using shorter duration or higher credit quality bonds versus maximizing investment yield with longer duration or lower credit quality bonds.

High Yield Bonds are those with lower credit ratings that pay higher interest.

Filed Under: Investing Tagged With: Bond, Funds, Hedge Your Portfolio, Low Volatility, Volatile Market, Your Portfolio Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.