High Yield Bonds

High Yield Bonds may be the best kept secret in the investing world. Started by a few small companies in the 1980's, they were primarily used to develop take overs and to finance mergers. Today, they are used by a broader spectrum of investors to produce a higher yield percentage than other investments. They rely on the credibility and stableness of the company.

So who issues high yield bonds? Thats a good question. There are actually several "types" of companies that issue these bonds.

Rising stars - emerging or start-up companies that have not yet achieved the operational history, the size, or the capital strength that is needed or required to receive an investment-grade rating. These companies use the bonds to provide "seed money" or start up money for there own benefit. They often can have a low credit rating since they have no history.

Fallen angels - former investment-grade companies that have "fallen" on hard times. This experience causes their credit to drop from investment-grade to lower ratings. They can achieve a higher credit rating if they make a comeback.

High-debt companies - leveraged with above-average debt loads that may cause concern among rating agencies. These companies often rate the same as blue chip companies. They may use the bonds to fend off take overs, buyouts, and mergers.

Leveraged buyouts (LBOs) - these types of bonds create a special type of company. This company will typically use high-yield bonds to buy a public corporation from its shareholders, often for the benefit of a private investment group that may include senior managers. Some of the company's assets or dividend may be sold to pay off the debt.

Capital-intensive companies - These companies turn to the high-yield market when they are not able to finance all their capital needs. This happens when their income cannot generate enough revenue, i.e. the income they generate through earnings or bank borrowings.

Foreign governments and foreign corporations - may rely on high-yield bonds to attract capital and investors. These types of bonds have risks based on the government and current countries financial and political status.




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				*High Yield Bonds* High Yield Bonds may be the best kept secret in the investing world. Started by a few small companies in the 1980's, they were primarily used to develop take overs and to finance mergers. Today, they are used by a broader spectrum of investors to produce a higher yield percentage than other investments. They rely on the credibility and stableness of the company. So who issues high yield bonds? Thats a good question. There are actually several "types" of companies that issue these bonds. Rising stars - emerging or start-up companies that have not yet achieved the operational history, the size, or the capital strength that is needed or required to receive an investment-grade rating. These companies use the bonds to provide "seed money" or start up money for there own benefit. They often can have a low credit rating since they have no history. *Fallen angels* - former investment-grade companies that have "fallen" on hard times. This experience causes their credit to drop from investment-grade to lower ratings. They can achieve a higher credit rating if they make a comeback. *High-debt companies* - leveraged with above-average debt loads that may cause concern among rating agencies. These companies often rate the same as blue chip companies. They may use the bonds to fend off take overs, buyouts, and mergers. *Leveraged buyouts (LBOs)* - these types of bonds create a special type of company. This company will typically use high-yield bonds to buy a public corporation from its shareholders, often for the benefit of a private investment group that may include senior managers. Some of the company's assets or dividend may be sold to pay off the debt. *Capital-intensive companies* - These companies turn to the high-yield market when they are not able to finance all their capital needs. This happens when their income cannot generate enough revenue, i.e. the income they generate through earnings or bank borrowings. *Foreign governments and foreign corporations* - may rely on high-yield bonds to attract capital and investors. These types of bonds have risks based on the government and current countries financial and political status.
Although investing in bonds carries a certain level of risk, they can be generally safe. Consult your broker or portfolio manager for more information on High Yield Bonds and how they can work for you. The Top 10 Industries Issuing High-Yield Corporate Bonds in 2003* Rank Industry Share of bond market value 1. Manufacturing 31.9% 2. radio and Television 11.0% 3. Electric Service 7.7% 4. personal & business services 4.7% 5. leisure 4.4% 6. natural resources 4.3% 7. Telephone Communications 3.7% 8. transportation 3.5% 9. retail 3.4% 10. wholesale 3.0% * Excludes issues with maturities of 1 year or less and all CDs Source: Thomson Financial Securities Data

Viatical Settlements \| Lemon Laws \| Criminal Defense Attorneys \| Online High Yield Finder All Original Content Copyright 2007 highyieldfinder.com Invest smartly. Work Smarter, not harder. If high yield returns are your ultimate goal, then you have come to the right place. Continue checking back here as we find more information about high yield returns and how you can best invest your money. We are constantly looking for the highest yeild investments that we can find, just so we can pass them on to you. After all, it is YOUR MONEY!!The information found on this website is here to help you, but even so, it is strictly an opinion. Information was gathered for this site from individuals who have seen results from their information. Results are not guaranteed and will be different for everyone.