Junk Bond Update

At the beginning of May 2013, had a average yield of 5.2%, 4.5 percentage points above U.S. government paper—well above the “crazily tight spread of 2.44 percentage points seen just before the (2008) financial crisis (source: WSJ). Issuance of junk bonds hit records in the U.S. and Europe in 2012.

 

In 1997, a group of Los Angeles-based traders, led by Michael Milken, helped structure and market the first “junk” bond, a $30 million offering for an oil company, Texas International.