High Yield Bonds also go by the name of, Small cap Bonds . These are bonds issued by companies or corporates that have a lower credit rating, typically non-investment grade, and which offer higher coupon or interest rate. While High Yield are majorly issued by companies that were previously investment grade issuers but have now seen a dip in their credit rating, these bonds are also issued by several emerging companies and startups that fall under this category. Since these companies have newly been established with no prior credit history the rating would most likely fall on the lower end.