A bond with a low rating. Bonds rated less than Baa3 by Moody's or BBB- by S&P or Fitch are considered high-yield bonds.
They have higher yields because they have a higher risk of default on the part of the issuer.
High-yield bonds are considered sufficiently high-risk that the law does not allow banks to invest in them.
They are also called low-grade bonds, and, informally, junk bonds.
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