The following Banking & Finance practice note Produced in partnership with Freshfields Bruckhaus Deringer LLP provides comprehensive and up to date legal information covering:
Bonds are capital markets instruments representing a form of debt security.
For more information on capital markets and bond issues, see Practice Note: Introduction to the debt capital markets.
High yield bonds, also known as junk bonds or speculative grade bonds, are bonds that generally offer investors higher rates of return than other types of corporate bonds because they are deemed to be riskier investments. High yield bonds are bonds that typically have been rated as sub-investment grade (Ba1/BB+ and below) at issuance by one or more of the major rating agencies (see Practice Note: Credit ratings).
High yield bondholders tend to be institutional investors such as pension funds, insurance companies and investment funds established for the purpose of investing in high yield debt products. The minimum denomination of high yield bonds is typically €100,000.
The high yield bond market has grown rapidly since the late 1970s when Michael Milken, at Drexel Burnham Lambert, and other investment bankers, including at the investment bank Donaldson, Lufkin & Jenrette, created a market for high yield bonds. Prior to that time, high yield bonds were limited to the debt of 'fallen angels'—investment grade companies whose rating had fallen to junk status (hence the name 'junk bonds'). Fallen angels would not issue new debt but rather their existing debt would trade at a discount
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Fraud by false representationFraud by false representation applies to a broader range of conduct than the offences under the preceding legislation (the Theft Act 1968 (TA 1968)). No gain or loss need actually be made, and no deception need operate on the mind of the deceived for the Fraud Act 2006
BREXIT: UK is leaving EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note. For further guidance on the impact of Brexit on e-money requirements, see Practice Note: Impact of Brexit: Payment services and electronic money directives—quick
An ad hoc arbitration is any arbitration in which the parties have not selected an institution to administer the arbitration. This offers parties flexibility as to the conduct of the arbitration, but less external support for the process. It can be quicker than institutional arbitration but not if
The right to notice means a right for the employee to remain in employment for the period of notice, not simply to be paid for it. An employer will therefore often include in the contract an express right to make a payment in lieu of notice ('PILON') as an alternative to giving notice, to ensure
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