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TeachMeFinance.com - explain junk bonds junk bonds -- Wall Street slang for bonds listed at below investment grade (below the top four ratings) by agencies that rate bonds. Such bonds are frequently unsecured or thinly backed by company assets, and thus carry a relatively high level of risk for investors. Consequently, the bonds must pay high yields, commonly three to four percent above high-grade corporate bonds. Some junk bonds are issued by those seeking to raise funds to finance their buying of stock and takeover of corporations, the assets of which are liquidated to pay for redemption of the bonds. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.