Many investors are wondering whether 2013 will be another stellar year for junk bonds, which were up 15% for 2012.
The corporate financing window remains wide open even for junk bonds.
"The recovery rate for senior bank loans is 70 to 80 cents on the dollar in a bankruptcy, " says Margolin, versus 25 cents for junk bonds.
For junk bonds, the jump is even more dramatic: 275 over Treasurys at the end of 2006 to 341 points as of Monday, according to Sanford Bernstein research.
Still, with the Federal Reserve buying bonds and pushing down yields on all fixed-income investments, investor appetite for junk bonds may continue unabated even if the opportunity for price appreciation is limited.
To do a quick and dirty analysis of the expected return for junk bonds, all you need to do is look at the yield and subtract the default rate ( read why here).
Record-low borrowing costs in the market for junk bonds, where LBOs are financed, is combining with rising confidence in the financial system to boost bets that a successful Dell deal will be followed by others.
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There is no sign that investors have any appetite yet for telecoms junk bonds, say.
And that leaves investors holding junk bonds for which they are not being compensated in higher interest.
If you are prepared for some risk, junk bonds pay about 5%, but they tend to get whacked when interest rates rise.
While Marilyn is willing to cherry pick junk bonds for some juicy yields at short maturities, she has also been telling investors that a bond fund bubble is forming and that it will pop soon.
But Mike, your name is so tied to the term junk bonds that you got blamed for the junk bond collapse of 1989 and 1990, but you get no credit for the recovery in 1991 and 1992.
In that case, the bank would not record all of the capital gain for the sale of the junk bonds, as some would now appear as an internal transfer of assets.
However, junk bonds are tracked for three market cycles, starting Jan. 31, 1994.
Taking Greek junk bonds in return for risk-free Bundesbank ones.
Taking a short position in junk bonds is a challenge for the retail investor.
First, we were treated to the revelation that Ben Bernanke and Tim Geithner, then still capo at the New York Fed, put taxpayers on the hook for tens of billions of dollars in junk bonds from Bear Stearns.
Del Vecchio defends Ranger Bear as a vehicle useful for hedging against bullish portfolios of stocks and junk bonds.
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The quest for higher yields is inflating a bubble in junk bonds, and investors are taking on more risk as they try to improve their performance.
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In a world where Federal Reserve zero-interest-rate policy has made it impossible to earn any real yield the 10-year Treasury rate is well below 2% on standard-issue bonds, the income payout on high yield bonds (the polite term for junk) is proving too hard to resist.
We saw this vicious cycle in junk bonds after Mike Milken was forced to suspend his activities as the market maker for the junk bond market.
Issuance of CCC bonds accounts for some 12% of junk issuance.
Junk bonds: talk about an awful description for non-investment grade debt.
Investors in American investment-grade bonds get the same yield as they would for junk in Japan.
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They are acting quite rationally, pocketing handsome fees for the gains they make in the wild bull run in junk bonds.
The Canadian Energy Field has become a happy hunting ground for higher yields than you can find outside the junkiest of junk bonds.
This rating officially makes Sotheby's debt into junk bonds - a class of debt considered too risky for many investors to hold.
On May 9, the China Securities Regulatory Commission announced that it will experiment with letting small and private companies issue junk bonds, a change that could make it easier for such companies to obtain credit.
The same goes for master limited partnerships in energy that the market considers the equivalent of junk bonds.
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