HY Debt (High Yield Debt)

High yield debt, often referred to as "junk bonds," represents loans or bonds issued by companies with lower credit ratings. These companies are considered more risky, which means they offer higher interest rates to attract investors. While this can provide the potential for greater returns, it also comes with a higher chance of default, meaning the company may fail to pay back the loan. Investors in high yield debt seek to balance the increased risk with the possibility of higher returns compared to safer, lower-yield investments.