Sentences with phrase «junk bond defaults»

2) We will see rising junk bond defaults in 2009.

If a junk bond defaults, you might not even get your initial investment back.

NEW YORK, Aug 14 (Reuters)- The global junk bond default rate rose to 1.79 percent in July from 1.44 percent in June as U.S. financial and real estate firms struggled to keep up with debt payments, Standard & Poor's said on Thursday.

Not exact matches

This «recent stream of defaults» pushed the default rate of junk - rated bonds in the US to 3.9 % for the trailing 12 - month period ended in March, up from 3.4 % in December.

This caused the default rate for broadcast & media junk bonds to spike to 20 %, from 3.7 %, and it caused the default rate for leveraged loans in the sector to spike to 16 %, according to Fitch Ratings, which added soothingly:

That's left a lot of junk bond fund managers with plenty of exposure to the energy sector at a time when oil prices have crashed and defaults, particularly among fracking companies, are rising.

The fund can purchase securities of any credit quality, including those in default, but it will primarily invest in investment - grade debt, with no more than 20 % of the portfolio invested in junk bonds.

The Obama Administration's Wall Street managers have kept the debt overhead in place — toxic mortgage debt, junk bonds, and most seriously, the novel web of collateralized debt obligations (CDO), credit default swaps (almost monopolized by A.I.G.) and kindred financial derivatives of a basically mathematical character that have developed in the 1990s and early 2000s.

Yet we also see very strong inflows into junk bond funds, based on the belief that these high yields represent value rather than information about default probabilities.

The proximate cause of death for virtually every defaulting junk bond is a liquidity crisis occasioned by either an inability to generate enough cash to service debt, or an inability to refinance maturing debt.

Junk bonds, for instance, are producing a less than pulse - quickening yield of 6 % which, adjusted for defaults (likely to explode during the next recession), isn't worth the risk — save in a few special situations.

Further, with junk grade defaults at negligible levels today, even higher risk bonds have not posed significant problems — although that does not always have to be the case.

The current retraction won't reach its nadir of 10 % junk - bond defaults and virtually closed markets until 2018, Fridson predicts.

Investments in high - yield («junk») bonds involve greater risk of price volatility, illiquidity, and default than higher - rated debt securities.

Also, stocks are volatile and generally the riskiest assets, with the possible exception of credit default swaps, high - yield «junk» bonds, and other similar assets.

Readers have no doubt noticed that numerous inter-market correlations seem to have been suspended lately, and that many things are happening that superficially seem to make little sense (e.g. falling junk bond yields while defaults are surging; the yen rising since the BoJ adopted negative rates; stocks rising amid a persistent decline in earnings growth; bonds, gold and stocks moving in unison, etc., etc.).

A partial but not complete list of worries includes: China melt down, Yuan reevaluation after effects or Taiwan action, global biomedical epidemics, e.g. Avian Flu, or bioterrorism outbreaks, trade wars (China, EU), major hedge fund bankruptcies, a PBGC (Pension Benefit Guaranty Corp.) shortfall crisis, major junk bond or emerging market bond default, a bank derivative blowup, Fannie Mae issues plus possible assorted natural disasters.

The idea of debt amnesties was to prevent debt from tearing society apart — to prevent the kind of crisis that the United States has been in since 2008, when President Obama didn't cancel the junk - bond debts, or the debts that tore the Greek economy apart — when the IMF and Europe imposed them on Greece instead of letting it default on debts owed to French and German bondholders.

They start defaulting on their junk bond debt.

Overall, default rates among junk - bond issuers are projected to move about 3 percent next year, according to Moody's Investors Service, up from 2.7 percent in the first 10 months of this year.

Non-investment-grade debt securities (high - yield / junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher rated securities.

Bonds rated «BB» to «Ba» or below are called «junk bonds», which means that default is more likely, and they are thus more speculative and subject to price volatiBonds rated «BB» to «Ba» or below are called «junk bonds», which means that default is more likely, and they are thus more speculative and subject to price volatibonds», which means that default is more likely, and they are thus more speculative and subject to price volatility.

However, this has also earned them the nickname of «junk» bonds because of their higher risk of default.

It certainly seems like junk bonds will be seeing more defaults in 2008.

The main danger of a junk bond fund is that there will be a higher rate of bankruptcy / default than in an investment grade bond fund.

«junk bond king» wrote a thesis that two percentage points were enough compensation for the likely higher default rate of a junk bond fund over a corporate bond fund.

High - yield, lower - rated («junk») bonds generally have greater price swings and higher default risks.

Starting in 2008 and into 2009, high yield corporate bonds (otherwise known as junk bonds) saw huge drops in price under the premise the America was going to see a massive wave of corporate defaults, the likes of which we hadn't seen since the Great Depression.

High - yield bonds (also known as «junk bonds») are subject to additional risks such as the risk of default.

High - yield («junk») bonds involve greater risk of price volatility, illiquidity, and default than higher - rated debt securities.

Lower ‐ quality fixed income securities, known as «high yield» or «junk» bonds, present greater risk than bonds of higher quality, including an increased risk of default.

However, the interest rate isn't necessarily the same thing as some bonds may have higher yields do to the potential for defaults like junk bonds for example.

The bubble was a combination of (a) teaser rates on option ARMs which were like financial time bombs, (b) liar loans in which the rules of good mortgage underwriting (20 % down, 28/36 ratios) went out the window, (C) people at rating agencies who decided that if one pools enough junk loans into one bond, it's magically AAA, and (D) Credit default swaps which encouraged these bad loans, and when they collapsed a number of people walked away with billions of dollars.

The U.S. territory also is grappling with $ 70 billion in debt, ratings firms have downgraded its bonds to one notch above junk and investors fear it could default on its obligations.

Junk bonds carry higher default risk and are thus far more sensitive to the health of the economy than investment - grade bonds.

Still, junk - bond investors currently have a modest margin for error, should the default rate pick up.

Historically, some 5 % of junk bonds have defaulted each year, though defaults in recent years have been running at more like 2 % or 3 %.

To compensate for the risk of defaults, junk bonds have, on average, yielded some 6 percentage points more than comparable Treasury bonds.

Non-investment-grade debt securities (high - yield / junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher - rated securities.

High - yield bonds, also known as «junk bonds,» generally have a greater risk of default, which increases the risk that an issuer may be unable to pay interest and principal on the issue.

Reach for yield in junk bonds and take on default risk?

The rate of default is much higher for high - yield bonds, fittingly referred to as junk bonds.

The Vanguard High - Yield (aka Junk) Bond mutual fund yields about 6.5 % (relatively high yield and perceived likelihood of defaults).

The theory pushed was that junk bonds offered higher returns but with a lower risk thanks to low default rates.

The rate of new junk bond issues grew so rapidly it easily outpaced the rate of defaults.

Investments in high - yield («junk») bonds involve greater risk of price volatility, illiquidity, and default than higher - rated debt securities.

This is much worse than junk bonds, since the default rate on those even at the height of credit crisis never reached 20 %.

Lower - rated or high yield debt securities («junk bonds») involve greater credit risk, including the possibility of default or bankruptcy.

I would add in other asset classes as well: credit default, emerging markets, junk bonds, low - quality stocks, the toxic waste of Asset - and Mortgage - backed securities, and private equity.

Junk bonds involve a greater risk of default or price changes due to changes in the issuer's credit quality.