South Florida Arbitration & Litigation Lawyer Blog
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.
If your stockbroker solicited you to invest in such an investment, especially if you were concerned with safety of principal, this may have been an unsuitable investment for you. Factors that the stockbroker should have taken into consideration in researching the investment, include the financial condition of the issuer, the source of funds that will be used to pay the bond obligations, the security, if any, associated with the bond, the duration of the bond obligation and the credit rating of the bond.
Please keep in mind that this 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 relative to this post, you should contact a qualified professional.
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At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.