High-yield bond
Personal Finance
High-yield bonds are bonds whose ratings from independent rating services are below investment grade.
As a result, to attract investors, issuers of high-yield bonds must pay a higher rate of interest than the rates that issuers of higher-rated bonds with the same maturity are paying. The higher rate translates to more income, which is the higher yield.
High-yield bonds may also be described, somewhat more graphically, as junk bonds.