A high yield bond is a bond that has higher yields but a lower credit rating than typical investment grade bonds. These bonds may also be referred to as "junk bonds" and are rated as below investment grade by organizations such as Moody's and Standard and Poor's. [Appendix no. 1] In general, companies that issue high-yield bonds may receive their rating due to certain characteristics, such as being less established than typical household brands, exhibiting weak financial performance, or may have suffered a financial setback at a certain point in their activity. company history. Although high yield bonds may seem to have a relatively negative reputation among investors, they possess many attractive advantages which include: portfolio diversification, higher yields, lower volatility thus making them a good long-term investment and the fact that bondholders have the priority of recovering their money over equity holders in the event of bankruptcy. These bonds are accessible to investors both as individual issues and through investments in high-yield mutual funds. On the other hand, there are certainly risks when investing in high-yield bonds, such as credit risk, where there is a possibility that the issuer will not meet principal or interest payments over the term and l Investment in these bonds ultimately depends on how informed the investor is and the amount of risk the investor is willing to tolerate. Similar to other types of securities, there is always the threat of economic recession and the risks that come with investing in international markets, such as political and currency risks. In contrast, high-yield bonds are better able to mitigate interest rate risks and are less vulnerable to drastic… financing bonds became popular during the 1990s in foreign markets such as America Latin, Asia and Europe, showing the increase in international attractiveness for these types of securities. However, outside of the US, the high yield market has taken longer to become popular and so there is still room for the development of high yield bonds within emerging market financial markets. It is safe to say that the high yield bond market will always exist as it represents a viable alternative for many fast-growing companies to acquire financing and is a rewarding option for investors. The key to the strong and still growing market demand for high-yield bonds rests on linking the [U.S.] economy's continued desire for capital with investors' desire for higher returns on their investments.