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Originally Posted by williaea
Of course the yields are high. That's cause they are going into bankruptcy in a few years and you'll never get your principle back! :-)
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Typically bond-holders are the first ones that have to be repaid in bankruptcy court. Before suppliers, stock holders, and even employees in some cases. Typically being the bond holder of a very large company is safe, even when they are technically "junk" bonds.
Didn't Chrysler repay all their bonds even after they went bankrupt? I recall some stories about how they were one of the best investments you could make because the raw assets of the company exceeded the cost to repay all the bonds, thus guaranteeing you'd get your money back, even if the company was sold off as scrap.