High Yield Bonds (also commonly known as Junk Bonds) are fixed-income debt securities issued by corporations or governments that have a lower credit rating than investment-grade bonds.
To compensate investors for the significantly higher risk of default (Credit Risk) associated with the issuer's financial instability, these bonds offer a higher interest rate (yield) compared to safer bonds.
Investment Grade: Bonds rated BBB- (S&P/Fitch) or Baa3 (Moody's) and above. These are considered lower-risk and safer for institutional investors.Rising Stars: Bonds that have an improving credit rating and are potentially moving from junk status toward investment grade.
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