expression

junk bond

a high-risk, high-yield bond with a low credit rating

In more detail

1. (noun) a bond (a loan certificate) issued by a company with a poor credit rating, offering high interest but with high risk of default

Examples

1. The investment fund bought junk bonds hoping to earn high returns despite the risk involved.

How to use junk bond

Junk bonds are used in financial and investment contexts to describe debt securities issued by companies with poor creditworthiness. The term is neutral within finance but can carry a negative connotation in general usage. Investors pursue them for the higher yields they offer despite the elevated default risk, making them common in discussions of high-risk investment portfolios and corporate finance.

Common phrases

junk bond market
junk bond investor
junk bond rating
trading in junk bonds
junk bond issuance
junk bond yield

Synonyms

high-yield bond · speculative bond · non-investment-grade bond · below-investment-grade security

Opposites

investment-grade bond · blue-chip bond

A common mistake

Learners sometimes confuse junk bonds with penny stocks or other high-risk investments; the term specifically refers to bonds (fixed-income securities), not equities.

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