Municipal Securities

High Yield – Junk Bond – Florida Investment Loss Litigation and FINRA Arbitration Attorney

Published on: August 23, 2013 | By Russell L. Forkey, P.A.

High Yield – Junk Bond Investment Loss – Florida Litigation and FINRA Arbitration Attorney:

A High Yield or Junk Bond is a bond with a credit rating of BB or lower by a recognized rating agency such as Fitch Ratings, Moody’s Investors Services, Morningstar Rating System and others. Although the term Junk Bond is commonly used, issuers and holders of such securities prefer the securities be call high yield bonds. Junk Bonds are usually issued by companies without long track records of sales and earnings, or by those with questionable credit strength. Since they are more volatile and pay higher yields than investment grade bonds, many risk-oriented investors specialize in trading them. The phrase “risk-oriented” being the operative term.

If you are an average investor, with fairly conservative investment objectives, these types of bonds are not for you. If you own these bonds, the current yield section of your statement, more likely than not, reflects a yield of around 10% or higher but compare that against the current market value. At the end of the day, especially when comparing the maturity of the bond to your age or when you might need the principal returned, what is more important, high risk yield or the protection of your principal.

Short-Term Bond Fund – South Florida Sock and Bond Investment Loss FINRA Arbitration and Litigation Attorney

Published on: August 22, 2013 | By Russell L. Forkey, P.A.

Short-Term Bond and Common Stock Investment Loss – South Florida FINRA Arbitration and Litigation Attorney:

A Short-Term Bond Fund is a bond mutual fund which invests in short-to-intermediate term bonds. Such bonds typically mature in 3 to 5 years and pay higher yields than the shortest maturity bonds of 1 year or less, which are held by ultra–short term bond funds. Short-term bond funds also usually pay higher yields than money market mutual funds, which buy short-term commercial paper maturing in 90 days or less. Short-term bond funds, while yielding less than long-terms bond funds, are also much less volatile, meaning that their value falls less when interest rates rise and rises less when interest rates fall.

Please keep in mind that the above information is being provided for educational purposes only. However, the focus on this article, especially based on the fact that it appears that higher interest rates are on the horizon, is that the duration of the bond and rising interest rates probably will have an adverse effect on the value of the bond. Notwithstanding the foregoing, this post is not designed to be complete in all material respects. Thus it should not be relied upon as providing legal or investment advice. If you have any questions concerning the contents of this post, please contact a qualified professional.

High Yield Bonds – Florida Bond Investment Loss FINRA Arbitration and Litigation Attorney

Published on: August 14, 2013 | By Russell L. Forkey, P.A.

Corporate and Municipal Bond, Florida Investment Loss FINRA Arbitration and Commercial Litigation Attorney, Russell L. Forkey, Esq.

A High-Yield Bond can be issued by a private or public company, as well as various municipalities and other governmental units. Many of these High-Yield Bonds are also known as Junk Bonds. These types of bonds usually have a rating of BB or lower and pay a higher yield to compensate for their greater risk.

For example, in times of low interest rates such as are being experienced now, high-yield bonds seem attractive to investors that are seeking increased income as a means of supplementing their income. However, the trade-off is that the investor could end up suffering extreme loss of principal as a result of the business operations of the issuer or in times of rising interest rates.

Taxable Municipal Bond – Bond Investment Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: July 27, 2013 | By Russell L. Forkey, P.A.

Taxable Municipal Bond – South Florida Bond Investment Fraud, Mismanagement and Misrepresentation, FINRA Arbitration and Litigation Attorney:

A taxable municipal bond is a taxable debt obligation of a state or local governmental entity. Taxable municipal bond are issued as private purpose bonds to finance such projects as a sports stadium, as municipal revenue bonds where caps apply or as public purpose bonds where the 10% private use limitation has been exceeded.

A municipal revenue bond is a bond that is issued to finance various types of public work projects like bridges, tunnels or sewer systems and with payments to the bondholders coming directly from the revenues of the project. For example, if a municipal revenue bond is issued to build a bridge, the tolls collected from the motorists using the bridge are committed for paying of the bond. As with all bond issues, it is important to read the indenture establishing the bond for holders of municipal revenue bonds hove no claims on the issuer’s other income or assets unless stated otherwise in the indenture. Consequently, the risk associated with these types of bonds rise and fall with the economic viability of the project.

Premium Bond – Florida Municipal, Corporate and Revenue Bond Fraud, Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: July 26, 2013 | By Russell L. Forkey, P.A.

Municipal, Corporate and Revenue Bond – South Florida Breach of Fiduciary Duty, Breach of Contract and Negligence FINRA Arbitration and Litigation Attorney:

A premium bond is a bond (Corporate, Revenue and Municipal) with a selling price above face or redemption value. For example, a bond with a face value of $1,000 would be called a premium bond if it sold for $1,100. This price does not include any accrued interest due when the bond is purchased. When a premium bond is called before scheduled maturity, bondholders are usually paid more than face vale, though the amount may be less than the bond is selling for at the time of the call.

Please keep in mind that the above information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. It should not be relied upon as legal or investment advice. If the reader has any questions concerning this post, you should contact a qualified professional.

City of Miami and Michael Boudreaux – South Florida (Miami) Municipal Bond Offering Fraud and Misrepresentation Litigation and FINRA Arbitration Attorney

Published on: July 19, 2013 | By Russell L. Forkey, P.A.

City of Miami and Michael Boudreaux – South Florida (Miami) Municipal Bond Offering Fraud and Misrepresentation Litigation and FINRA Arbitration Attorney:

Securities and Exchange Commission v. City of Miami, Florida, and Michael Boudreaux, Civil Action No. 1:13-cv-22600 (U.S. District Court for the Southern District of Florida, filed July 19, 2013)

The Securities and Exchange Commission announced that it recently charged the City of Miami and its former Budget Director with securities fraud in connection with several municipal bond offerings and other disclosures made to the bond investing public. The SEC’s action also charges the City with violating a 2003 SEC Cease-and-Desist Order which was entered against the City based on similar misconduct. This case is the SEC’s first ever injunctive action against a municipality already under an existing SEC cease-and-desist order.

Risks of High Yield Corporate Bonds – South Florida High Yield Corporate Bond Fraud, Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: July 3, 2013 | By Russell L. Forkey, P.A.

Risks Associated With High-Yield Corporate Bonds. Florida High Yield Corporate Bond Fraud, Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney.

Some investors with a greater risk tolerance may find high-yield corporate bonds attractive, particularly in low interest rate environments. If you are considering buying a high-yield bond, it is important that you understand the risks involved.

Default Risk. Also referred to as credit risk, this is the risk that a company will fail to make timely interest or principal payments and default on its bond. Defaults also can occur if the company fails to meet certain terms of its debt agreement. Because high-yield bonds are typically issued by companies with higher risks of default, this risk is particularly important to consider when investing in high-yield bonds.

High Yield Corporate Bond – Florida High Yield and Fixed Income Fraud, Misrepresentation and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: July 3, 2013 | By Russell L. Forkey, P.A.

High Yield Corporate Bonds – Florida High Yield Corporate Bond and Fixed Income Breach of Fiduciary Duty, Negligent Supervision and Breach of Contract FINRA Arbitration and Litigation Attorney:

A high-yield corporate bond is a type of corporate bond that offers a higher rate of interest because of its higher risk of default. When companies with a greater estimated default risk issue bonds, they may be unable to obtain an investment-grade bond credit rating. As a result, they typically issue bonds with higher interest rates in order to entice investors and compensate them for this higher risk. High-yield bond issuers may be companies characterized as highly leveraged or those experiencing financial difficulties. Smaller or emerging companies may also have to issue high-yield bonds to offset unproven operating histories or because their financial plans may be considered speculative or risky.

Please keep in mind that the above information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If you have any questions concerning the contents of this post, the reader should contact a qualified professional.

Risks Associated With Corporate and Municipal Bonds – Florida Corporate and Municipal Bond FINRA Arbitration and Litigation Attorney – Investors May Be Able to Recover Their Investment Losses

Published on: July 1, 2013 | By Russell L. Forkey, P.A.

South Florida Corporate and Municipal Bond FINRA Arbitration and Litigation Attorney. Various Risks Associated With Corporate Bond:

There are a number of risks associated with corporate bonds. The following list is not designed to be complete. However, this post does describe many of the more well known. Please keep in mind that this post is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the following, you should consult a qualified professional.

Credit or Default Risk: Credit or default risk is the risk that a company will fail to timely make interest or principal payments and thus default on its bonds. Credit ratings try to estimate the relative credit risk of a bond based on the company’s ability to pay. Credit rating agencies periodically review their bond ratings and may revise them if conditions or expectations change.

The Relationship Between Corporate and Municipal Bond Prices, Interest Rates and Yield – South Florida FINRA Arbitration and Litigation Attorney

Published on: July 1, 2013 | By Russell L. Forkey, P.A.

The Relationship Between Corporate and Municipal Bond Prices, Interest Rates and Yield. South Florida FINRA Arbitration and Litigation Attorney.

The price of a bond moves in the opposite direction than market interest rates. When interest rates go up, the price of the bond goes down. When interest rates go down, the bond’s price goes up. A bond’s yield also moves inversely with the bond’s price. For example, let’s say a bond offers 3% interest, and a year later market interest rates fall to 2%. The bond will still pay 3% interest, making it more valuable than newly issued bonds paying just 2% interest. If you sell the 3% bond, you will probably find that its price is higher than a year ago. Along with the rise in price, however, the yield to maturity for any new buyer of the bond will go down. Now suppose market interest rates rise from 3% to 4%. If you sell the 3% bond, it will be competing with new bonds that offer 4% interest. The price of the 3% bond may be more likely to fall. The yield to maturity for any new buyer, however, will rise as the price falls.

It’s important to keep in mind that despite swings in trading price with a bond investment, if you hold the bond until maturity, the bond will continue to pay the stated rate of interest as well as its face value upon maturity, subject to default risk.