Definition

A bond from a company with a credit rating so low it's essentially an IOU written on a napkin. They offer higher interest rates to compensate for the very real possibility that the company might not exist next year. Wall Street rebranded them as "high-yield bonds" because junk sounded too honest.

Example Usage

"He invested in junk bonds for the high yield. It's like loaning money to your flakiest friend, except your friend is a corporation and the napkin IOU is legally binding."

Related Terms

Intermediate

depletion

The exhaustion of a resource faster than it can naturally replenish itself, whether that's oil reserves, soil nutrients, or your marketing budget by mid-quarter. In accounting, it's the method for allocating the cost of extracting natural resources. Basically, fancy terminology for "we used it all up."

💰 Finance / Accounting
Advanced

credit default swap

An insurance contract against a borrower defaulting on debt, except it's called a 'swap' instead of insurance to avoid pesky insurance regulations. The financial instrument that nearly destroyed the global economy in 2008.

💰 Finance / Accounting
Advanced

transfer pricing

The prices charged between subsidiaries of the same multinational corporation for goods or services, theoretically based on arm's-length principles but conveniently used to shift profits to low-tax jurisdictions. Tax authorities are not amused.

💰 Finance / Accounting
Intermediate

Merger

When two companies combine to become one larger, more dysfunctional company with twice the middle management. It's always sold as a "merger of equals" and always ends with one side updating their resumes within six months.

💰 Finance / Accounting
Advanced

DAGMI

Crypto-bro battle cry meaning 'Divine Anarchy Gonna Make It,' the hopium-infused mantra chanted when an NFT project's floor price goes up. It's the digital asset equivalent of manifesting abundance, except with more blockchain and fewer vision boards.

💰 Finance / Accounting
Intermediate

solvent

In finance, the blessed state of actually being able to pay your debts when they come due—a concept that feels increasingly mythical. Your assets exceed your liabilities, you can sleep at night, and creditors aren't calling. In chemistry, it's the liquid that dissolves other substances, which is coincidentally what financial insolvency does to your peace of mind.

💰 Finance / Accounting

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