Additional Risks for High-Yield Bonds Clause Samples

Additional Risks for High-Yield Bonds. In addition to the risks listed above, high-yield bonds are subject to additional risks such as: (a) Higher credit risk Since high-yield bonds are typically rated below investment grade or are unrated, they are often subject to a higher risk of issuer default. (b) Vulnerability to economic cycles During economic downturns high-yield bonds typically fall more in value than investment grade bonds as (i) investors become more risk averse and (ii) default risk rises.