Also known as junk bonds. Bonds rated by credit rating agencies as sub-investment grade (in other words, below BBB in the case of Standard & Poor’s or below BAA in the case of Moody’s). They tend to be fixed rate, with maturities of seven to ten years, usually with a bullet repayment at maturity. Some issues are structured as discount notes, that is, they do not pay cash interest for an initial period and are therefore issued at a discount to their final redemption value.