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Bonds

Junk Bonds (High Yield)

Bonds rated below investment grade, offering higher yields to compensate for higher default risk.

In depth

High-yield bonds (HY) typically yield 3-7% above Treasuries. Spreads widen in recessions (default fears) and tighten in expansions. Default rates historically average ~3-4% but spike to 10%+ in severe downturns. Provides higher income and equity-like returns over cycles.

Frequently asked about Junk Bonds (High Yield)

What is Junk Bonds (High Yield)?

Bonds rated below investment grade, offering higher yields to compensate for higher default risk. High-yield bonds (HY) typically yield 3-7% above Treasuries. Spreads widen in recessions (default fears) and tighten in expansions. Default rates historically average ~3-4% but spike to 10%+ in severe downturns. Provides higher income and equity-like returns over cycles.

Why does Junk Bonds (High Yield) matter for investors?

In bonds, Junk Bonds (High Yield) is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is Junk Bonds (High Yield) used in practice?

High-yield bonds (HY) typically yield 3-7% above Treasuries. Spreads widen in recessions (default fears) and tighten in expansions.

Recent news mentioning Junk Bonds (High Yield)

First Eagle Sells $575M Junk Bonds to Finance Diamond Hill Acquisition

The Quick Take * Genstar Capital-backed First Eagle Investments is raising $575M via junk bonds to acquire Diamond Hill Investment Group * No market price reaction data available; deal represents a significant leveraged acquisition in the asset-management sector * No analyst commentary reported; the use of high-yield debt signals confidence in combined firm's cash-flow generation * Completion of the bond sale will determine deal closure timeline; credit market appetite for the offering is k

May 6, 2026

Related terms

Credit Rating

An assessment of a borrower's creditworthiness by rating agencies.

Credit Spread

The yield difference between a corporate or sovereign bond and a comparable Treasury.

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