In most instances, these deals are structured to become financed by junk bonds.
The junk bond industry produced as an alternative for the personalized placement of high#yield, high#risk bonds.4 The devel#opment with the junk bond industry marked the occurrence for ones very first time simply because pre#1929 crash days of public purchases at a critical level of less than investment#grade fixed#income securities.5
The investment banking home Drexel Burnham Lambert played a major role in the development in the junk bond market.6 Michael Milken was the main junk bond mandarin at Drexel Burnham.
Drexel Burnham Lambert, led by Milken in its junk bond operations, continued to be a major player within the development of the junk bond market. In fact, the firm eventually pub#lished an index of 110 leading junk bonds.
The original impetus for ones development from the junk bond market was provided by the combination in the bull marketplace in equity securities, which started out in August 1982, and also the recovery inside the recession from the early#1980s, which began in 1983.
It was also observed how the greater return on junk bonds more than compensated for ones systematic risk associated from the securities.14 Further, it was observed how the word of problem of junk bonds tended to become lower than that for investment#grade bonds.15 The shorter terms are a methods of reducing the risk associated with junk bonds.
The search examined the rise and fall inside the popularityof the so#called junk bond industry within the United States. As junk bonds have been and are issued in conjunction with leveraged buyouts (LBOs), this type of financial maneuver was also examined.
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