The Public Market for New Speculative-Grade Bonds, Also Known as High-Yield

The public market for new speculative-grade bonds, also known as high-yield or junk bonds, was created virtually single-handedly by Michael Milken and his firm, Drexel Burnham Lambert, in the late 1970s.Prior to that time, the only corporate bonds that carried a speculative-grade rating were so-called _______, bonds that initially garnered an investment-grade rating, but later the issuer experienced financial distress so that their rating fell into the speculative-grade category.

A) discount bonds
B) concession bonds
C) fallen angels
D) cut rate bonds