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At every rating, municipal bonds default less often than similarly rated corporate bonds, according to Moody's.
For instance, Ba bonds default far more often than triple-As.
It also reported a $490 million unrealized loss on contracts that require payouts if some high-yield bonds default between now and 2013.
One set of securities, known as an equity tranche, pays the highest returns but is the first to suffer if the underlying bonds default; other securities offer a much lower yield but a triple-A credit rating, because a lot of defaults would be needed to trigger losses.The result of this process has, in theory, helped the market.
These investors, who probably represent about 2 to 3 percent of Greece's privately held debt, are betting that Athens and its European supporters — contrary to their public pronouncements — will prefer to pay them back in full rather than let the bonds default.
Sometimes junk bonds default.
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Initially, we examine term-structure models that price both bonds (default-free and defaultable) and fixed-income derivatives with payoffs in terms of prices or yields on these bonds.
Paweł Morski (@Pawelmorski) Greek Bonds: new post-default high.
About 8.9percentt of high-yield bonds defaulted last year, up from 6.3percentt of junk bonds in 2000.
Many of the bonds defaulted, damaging customers' confidence in Italian banks and bankers.
If none of the bonds defaulted, the schools would receive about $1.8 million a year after paying off their own debt.
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