are corporate bonds high risk
What is a high-yield corporate bond? A high-yield corporate bond is a type of corporate bond that offers a higher rate of interest because of its higher risk of default. When companies with a greater estimated default risk issue bonds, they may be unable to obtain an investment-grade bond credit rating. conomic risk. If the economy falters, some investors are likely to try to sell their bonds. In what is known as a âflight to quality,â a number of investors may decide to replace their riskier high-yield bonds with safer ones, such as u.s. treasury bonds.