, Columnist
What Does a Junk Bond Even Mean Anymore?
A relentless rally in 2019 has taken the “high” out of high-yield corporate debt.
It’s hard to tell what’s junk.
Photographer: Balint Porneczi/Bloomberg
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Some people who trade high-yield corporate debt bristle at the moniker “junk bonds.” It’s definitely a more loaded term than the credit-rating company lingo of “speculative grade” or “non-investment grade,” but it’s a useful shorthand that reminds potential buyers that the securities are not for the faint of heart.
Or, at least, junk bonds used to be considered risky. The way the market has skyrocketed this year, however, it’s worth wondering whether anyone sees the securities — particularly those rated double-B, just below investment grade — as speculative anymore.