 High-Yield Bonds
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High-Yield Bonds
High-yield bonds are issued by organizations that do not qualify for "investment-grade" ratings by one of the leading credit rating agencies. For this reason, issuers of high-yield bonds must pay a higher interest rate to attract and to compensate them for the increased risk of default—not paying interest or principal in a timely manner—associated with investing in organizations of lower credit quality.
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