High-Yield Bonds
Bonds are debt instruments, usually issued for a period of more than one year with the intention of raising capital by borrowing from the bond holders. A bond is typically a promise to repay the principal along with interest on a specified date. High-yield bonds are rated less than Baa by Moody’s or less than BBB by Standard & Poor’s. These types of bonds typically exhibit greater risk (lower quality) than Investment-Grade Bonds, but offer the opportunity for greater returns.
