The investor was bamboozled into buying junk bond .
Just like junk bonds, another once-misused financial instrument, many of the new derivatives will be back, for no better reason than that they are useful.
Traditional distress funds have drifted reluctantly into risky, but still solvent, junk bonds and high-yield loans to keep business ticking along.
They offer a lucid explanation of how the debt markets evolved from junk bonds to securitised loans, changing the types of deals that private-equity firms were able to finance.
Yet, with a 20% average yield, junk bonds could provide nice returns, even in that scenario.
Michael Milken will always be synonymous with the term ”junk bond king.
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