Speculative-grade bond. Speculative Grade Bond synonyms, Speculative Grade Bond pronunciation, Speculative Grade Bond translation, English dictionary definition of Speculative Grade Bond. Bond rated Ba or lower by Moody's, or BB or lower by S&P, or an unrated bond. Speculative-grade bond Bond rated Ba or lower by Moody's, or BB or lower by S&P, or an unrated bond. Also called speculative security, speculative grade bonds are considered unsuitable for …

need a lifeline, too. The differences between investment-grade and speculative-grade bonds are even more striking when the data are disaggregated by maturity.

A speculative-grade bond is defined by Moody’s as one with a Ba or lower rating, a BB or lower by Standard & Poor’s, or an unrated bond (source: Nasdaq Business Glossary) We call high-yield high-risk bonds junk bonds. A bond that is speculative-grade has a rating lower than Baa from Moody's Investors Service, a rating lower than BBB from Standard & Poor's or both. This status should be a waving red flag to risk-averse investors. The investment-grade category has four rating grades while the speculative-grade category is comprised of six rating grades. Data is from the Bank of America Merrill Lynch US Corporate Master Index. The following is a speculative grade corporate bond return calculator which computes total return of corporate bonds rated CCC or lower. The estimated option values for investment-grade bonds average 2.4% of the gross proceeds, compared with 1.46% for the speculative-grade bonds. Example of a speculative investment. For the 17 months showing a higher speculative-grade bond yield 12-months later, the averages were 5.51% for the speculative-grade yield, 372 bp for the high-yield bond spread, 6.52% for the bond yield of Define Speculative Grade Bond. Bonds rated lower than investment grade on their date of issue are called speculative grade bonds, or colloquially as "junk" bonds. speculative-grade bonds, also called “junk” or “high yield” refers to bonds rated lower than BBB. Bond ratings are representations of the creditworthiness of corporate or government bonds Fixed Income Securities Fixed income securities are a type of debt instrument that provides returns in the form of regular, or fixed, interest payments and repayments of the. These credit-rating agencies assess the credit risk of the issuer of the bonds, and assign them a credit rating based on information available at the time. Speculative-grade bonds are issued by companies perceived to have a lower level of credit quality compared to more highly rated, investment-grade, companies. See: Junk Bond Speculative Grade bonds (also known as High Yield bonds) are those rated BB+ and below by Standard & Poor’s (S&P) or Fitch and Ba1 and below by Moody’s. Optionally, it can factor in inflation measured by the Consumer Price Index. WikiMatrix In a leveraged buyout (LBO), an acquirer would issue speculative grade bonds to help pay for an acquisition and then use the target's cash flow to help pay the debt over time. never buy junk bonds. High yield bonds make up a small portion of the nearly $1.5 trillion in annual corporate bond issuances in the United States and represents the junior tiers of capital structure. Since the risk of default is higher with speculative grade bonds, investors will demand they pay a higher rate of interest too.

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My Bloomberg Opinion colleague Noah Smith said speculative-grade borrowers .

Any bond that carries a rating lower than BB is said to be of speculative-grade or a junk bond. speculative grade Debt security that is given 'sub-investment' rating by bond rating agencies, equating to a rating of 'BB' (as rated by Standard & Poor) or 'Ba' (as rated by Moody's) or lower.