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A month ago, he wasn't interested in junk issues.
Reaching for yield, some managers lowered their standards, even including some junk issues.
In January and February, 45% and 47% respectively of new junk issues carried a rating of B- or lower.
Drexel's fees on junk issues were 3-4%; less than 1% was typical for investment-grade bonds.
Currently, it holds about 23percentt of assets, almost as much as permitted, in junk issues, those rated below BBB- by Standard & Poor's.
Yet remarkably few junk bonds went bad and investors achieved high rates of return.This set the stage for the opening of a sizeable market for new junk issues in 1977.
Similar(38)
Even if you do not count the large quantity of bonds issued by telecoms companies that are now bust or nearly so, the average junk issue trades at a yield of some ten percentage points above Treasury bonds.
As for the typical new junk issue these days, Monrad says, "You just hold your nose".
Junk issued by telecoms and other tech outfits in the late 1990s are now history or are seasoned enough to survive.
The buzzards' bounty should increase because of the huge amount of junk issued in the 1990s that is due to mature soon: $28 billion this year, $53 billion in 2002 and $66 billion in 2003.
Even better-class bonds are not as pukka as they once were: much of the non-junk issued since 1992 has been rated BBB-, the lowest investment grade.Like all other credit, the junk-bond market was badly damaged during the recession.
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