Page Perry

Junk bonds have benefitted both investors and issuers over the past few years, providing borrowers with some of the lowest interest rates ever, while providing yield-hungry investors with better returns than they could receive by investing in investment grade debt. Junk bonds produce higher yields because of the increased risk of default by the issuer. “But investors run the risk of having the tide turn against them should interest rates start rising. Some analysts have begun suggesting that day could come soon” (“Junk Bonds Feed a Hungry Market,” by Matt Wirz, Wall Street Journal).