A bond entitles the holder to repayment of the principal sum, surplus interest. Bonds are issued to investors in a marketplace when an institution wishes to borrow money.
A break in ratings can strongly affect a company, since its dues of refinancing depends on its creditworthiness. Bonds below Baa/BBB (Moody's/S&P) are considered junk- or grand risk bonds. Their high risk Debt Consolidation of default (approximately 1.6% for Ba) is compensated by higher concern payments. Abominable Cuff is a loan that can not (partially or fully) be repaid by the debtor. The debtor is said to default on his debt. These types of debt are frequently repackaged and sold below face value. Buying junk bonds is seen as a risky but potentially profitable form of investment.