Alamo Capital has specialized in High Yield bond investing since 1987. We have an in-house High Yield bond trading desk that is focused in maintaining a competitive bond inventory. We are able to provide our investors access to the primary and secondary High Yield bond market.
What Are High Yield Bonds?
High yield bonds are issued by a corporation or municipality that a major bond rating agency deem to be at a higher risk of default than investment grade bonds. Usually this is because of capital strain, high expenditures, volatile market conditions or other factors that may restrain or affect cash flow.
- High yield bonds typically pay a high yield to compensate for the risk the investor takes when buying them.
- High yield bonds are more risky, they also have the potential to add more return and often have higher coupons so the investor earns more interest income, thus high yield bonds can be attractive for an investor willing to take risk.
- High yield bonds with an S&P/Fitch rating below BBB-or Moody’s Ba2 are considered high yield or “non-investment grade” bonds.
Key Points About High Yield Bond Investing:
- High Yield Bonds Advantages: Normally long-term bonds have the highest yield.
- High Yield Bonds Disadvantages: Price volatility/risk of default.
- Why investors do it: To generate income, to fund a future event and for tax advantages.
Alamo Capital offers secondary liquidity on High Yield bonds and offerings can be found on BOLTS. Click here to view our Bond On-Line Trading System inventory.
If you are interested in learning more about high yield bonds, please contact an Alamo Capital Bond Specialist by calling (877) 68-ALAMO – or – (877) 682-5266 or email [email protected]