11] The lack of association between the stock-price reaction and real estate holdings or financial strength ratings is consistent with the argument that individual policyholders were expected to respond to press coverage of junk bonds
The junk bond
market is very hot right now, with investors pouring in a lot of cash based on the strong returns," observed Joel Friedman, director at Standard & Poor's in New York.
Hayden, D-Los Angeles, said he was particularly concerned with contributions from Apollo Advisors, a Century City-based investment company formed by some of the principals who had worked for Drexel Burnham Lambert during its days of selling junk bonds
3 billion of fresh cash to junk bond
funds in the first quarter of 1992, on top of $3.
Because First Capital was forced into conservatorship last May, in part because of its extensive junk bond
holdings, Pacific Mutual will immediately begin to liquidate the company's junk bonds
in an orderly manner and replace them with investment-grade assets.
8 /PRNewswire/ -- With yields on money funds and CDs now below 5 percent, small investors are rushing into risky junk bond
mutual funds that yield 10 percent or more, according to data gathered for MONEY magazine's Small Investor Index.
Asquith, et al interpret their findings as clear evidence that the probability of junk bond
defaults increases with the age of the bonds.
And although they are paying higher risk premiums, non-investment-grade companies still are able to raise funds: Junk bond
offerings have accounted for about 25 percent of the gross issuance this year.
In turn, Milken and his brokerage firm, Drexel Burnham Lambert, were looking for funds to create their dreamed-of junk bond
funds attracted huge amounts of investor capital in the 1980s.
Concerns Regarding Junk Bond
Market Exceed 'Credit Crunch' Worries
So far the defaults have remained very low and thus the investors have continued to pour money into junk bond
ETFs-which are the most convenient way to invest in this asset class.
Red flags, including ugliness in the junk bond
market, options activity and the ease with which support levels have been broken suggest more selling ahead.
Institutional investors typically grab the lion's share of public bonds, but does it make sense for casual investors to help float a $15 billion loan to a nearly bankrupt state whose credit has been downgraded by Wall Street to near junk bond
It helps that junk bond
funds have enjoyed an impressive run.