Fixed Income
Junk Bond
Definition
What is Junk Bond?
An informal term for a below-investment-grade bond.
Example in practice
How This Looks in Practice
The bond's high coupon reflects its junk rating and elevated default riskThe risk that an issuer does not pay interest or principal when due..
Keep learning
Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.