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Junk Bonds

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BUSINESS
August 19, 1990 | JAMES S. GRANELLI, TIMES STAFF WRITER
FarWest Savings had long been a good investment for the Belzberg brothers of Canada--Samuel, Hyman and William. Acquiring FarWest in 1974 gave the Belzbergs a foothold in the United States. Then, using the Newport Beach thrift and First City Financial Corp. Ltd. in Vancouver, Canada, they became among the most feared corporate raiders and takeover strategists on the U.S. scene during the 1980s. Often acting as greenmailers, their hostile bids made them millions of dollars. But today, their U.S.
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BUSINESS
April 1, 2014 | By Lauren Beale
After an international bidding war, a Westside mansion often described as a French palace has changed hands for $102 million, making it the most expensive residential sale ever recorded in Southern California. As is often the case with high-end properties, the identity of the trophy home's unnamed buyer has been obscured behind layers of lawyers, agents and a limited liability company. But the real estate equivalent of a bread crumb trail suggests that the purchaser of the opulent estate is onetime junk bond king Michael Milken, who has spent more than two decades devoted to philanthropic efforts since he pleaded guilty in 1990 to securities fraud.
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BUSINESS
January 27, 2009 | Tom Petruno
The corporate junk bond market once again is living up to its name, as defaults continue to surge. A total of 15 companies worldwide have defaulted on their bonds this month, triple the total in January 2008, according to Standard & Poor's. The casualties this month include Lyondell Chemical Co., cable TV firm Charter Communications and mattress maker Simmons. All of the 15 were U.S. companies except one: Canadian telecom giant Nortel Networks.
BUSINESS
December 13, 2012 | By Andrew Tangel, Los Angeles Times
NEW YORK - Low interest rates pushed down by the Federal Reserve have opened a spigot of easy money to companies with less than sterling credit. The Fed, which signaled Wednesday that it would aggressively keep rates low until unemployment fell below 6.5%, has been pumping billions of dollars into the economy. And the historic rate drops are nudging investors into riskier investments. One place that has attracted investors is the debt of companies with non-investment-grade, or "junk," credit ratings.
BUSINESS
December 13, 2012 | By Andrew Tangel, Los Angeles Times
NEW YORK - Low interest rates pushed down by the Federal Reserve have opened a spigot of easy money to companies with less than sterling credit. The Fed, which signaled Wednesday that it would aggressively keep rates low until unemployment fell below 6.5%, has been pumping billions of dollars into the economy. And the historic rate drops are nudging investors into riskier investments. One place that has attracted investors is the debt of companies with non-investment-grade, or "junk," credit ratings.
BUSINESS
June 6, 2009 | Tom Petruno
Sticking with stocks was a good idea this year. Sticking with junk corporate bonds was an even better idea. The junk, or high-yield, market has rallied powerfully since the stock market bottomed on March 9. Bond prices have surged, driving yields down sharply. The average annualized yield on an index of 100 junk issues tracked by KDP Investment Advisors has plunged to 10.53% as of Friday, down from an 18-year high of 17.7% in December.
BUSINESS
May 24, 1987 | NANCY RIVERA BROOKS
Webster's New World Dictionary defines junk as "useless or worthless stuff"; Drexel Burnham Lambert, king of the "junk bond" underwriters, obviously has a different view. And while Drexel has long since abandoned its attempts to rub out the term junk bonds, the investment banker is working hard to change the image of the bonds and to deflect attempts by Congress to limit uses of the high-yield, less-than-investment-grade securities.
CALIFORNIA | LOCAL
February 14, 1990
Nothing new in the idea that those who are ready to take big economic risks should be compensated, if they're lucky, with big economic rewards: It's as old as commerce itself. For centuries, the prospect of huge profits was precisely what encouraged investors to finance dangerous years-long sea voyages or land caravans. If the ships or the camels eventually came home, laden with eagerly sought cargoes, the daring investor had a good chance to become rich.
BUSINESS
August 15, 1996 | BILL ATKINSON, Bill Atkinson writes for the Baltimore Sun
The last place anyone might think of as a safe haven for their money is the junk bond market. Remember junk bonds? They were the securities embraced by Michael Milken, who used them to finance scores of corporate takeovers in the 1980s. They ended up crippling companies under crushing debt and forcing layoffs and failures. But stack up the performance of junk bonds against corporate bonds and the results are eye-opening.
BUSINESS
May 12, 1985
Naturally the Federal Reserve Board would resist controls on junk bonds, just as it would resist control over their power to create "junk money" out of air by means of bookkeeping entries. This abuse--and the technique by which our banking system utilizes fractional reserve banking to create vast new wealth on paper--has brought us to the point of international monetary collapse with hundreds of billions of dollars in worthless loans which, on paper, appear to be earning handsome interest payments, but which, in reality, have inflicted grievous hardships upon consumers, farmers, industry and foreign nations.
BUSINESS
October 7, 2012 | By Stuart Pfeifer, Los Angeles Times
With interest rates at near-record lows, these have not been good times for investors looking to generate low-risk income. Money-market accounts are paying an average of 0.5%. (Think about that: A $1-million deposit into an average money-market will yield a whopping $5,000 a year.) Even five-year CDs are yielding just 1.5% on average. So, where's an income-hungry investor to turn? One option is high-yield bonds, which are paying about 6% but carry risk that issuing companies may default, eroding the bonds' value.
CALIFORNIA | LOCAL
November 21, 2011 | Times wire services
Ted Forstmann, a longtime Wall Street financier and philanthropist who was a major player during the wave of corporate takeovers in the 1980s, including the battle for RJR Nabisco in 1988, died Sunday. He was 71. The cause was brain cancer, according to a statement from sports marketing giant IMG, where Forstmann served as chairman and chief executive. He was the senior founding partner of the investment firm Forstmann Little & Co. Forstmann Little, which was founded in 1978, completed leveraged buyouts of companies including Dr. Pepper, Yankee Candle, Community Health Systems and the cable TV technology company General Instrument.
CALIFORNIA | LOCAL
August 24, 2011 | By Larry Gordon, Los Angeles Times
A $10-million gift to UCLA's law school from alumnus Lowell Milken is stirring debate on the campus about the decision to name a business law institute for the former financier, who was linked to Wall Street's junk bond scandal two decades ago. A prominent business law professor has raised objections to the Milken gift and to UCLA's announcement this month that it will establish the institute in his name. But other law school faculty, along with top UCLA administrators, say they welcome the donation, noting that Milken was not convicted of any wrongdoing.
BUSINESS
April 17, 2011 | By Andrew Leckey
Question: Can I expect my shares of Time Warner Inc. to continue to gain in value? Answer: Long-term success for this media and entertainment company is likely to depend on original thinking in adapting to a changing media landscape. Time Warner owns cable TV channels HBO, CNN, TNT and TBS; movie studio Warner Bros.; and such magazines as People, Time and Sports Illustrated. It generates nearly one-third of its sales outside the U.S. The company's bottom line is likely to get a boost this year from film sequels "Harry Potter and the Deathly Hallows: Part 2," "The Hangover: Part II" and "Happy Feet 2. " On the smaller screen, TBS has a late-night hit on its hands with "Conan," but HBO has yet to equal past blockbusters "The Sopranos" and "Sex and the City.
CALIFORNIA | LOCAL
November 30, 2009
Fred Joseph Junk-bond market co-creator Fred Joseph, 72, who as chief executive of investment bank Drexel Burnham Lambert helped create the modern junk-bond market in the 1980s before the firm's collapse, died Fridayin New York of multiple myeloma, said John F. Sorte, chief executive of Morgan Joseph & Co. Inc. Joseph arrived on Wall Street in 1963, joining E.F. Hutton. He later moved to Shearson Hammill, rising to chief operating officer before leaving to join Drexel's corporate finance department in 1974.
BUSINESS
June 6, 2009 | Tom Petruno
Sticking with stocks was a good idea this year. Sticking with junk corporate bonds was an even better idea. The junk, or high-yield, market has rallied powerfully since the stock market bottomed on March 9. Bond prices have surged, driving yields down sharply. The average annualized yield on an index of 100 junk issues tracked by KDP Investment Advisors has plunged to 10.53% as of Friday, down from an 18-year high of 17.7% in December.
BUSINESS
January 18, 2003 | From Reuters
Investors disgruntled with paltry interest rates on the safest assets are pouring cash into junk bond mutual funds, betting that a recovering economy will lessen the risks of the securities. U.S. junk bond mutual funds took in a net $927.8 million in the latest week, the 12th-biggest inflow on record, pushing total January inflows so far to nearly $2 billion, according to AMG Data Services.
BUSINESS
November 27, 1991 | TOM PETRUNO
If stock prices keep sliding, are junk bonds sure to follow? The market for such high risk, high-yield corporate bonds has held up remarkably well over the past week, despite Wall Street's sudden gloom over the economy. But some junk pros say investors are showing the first signs of worry. One junk bond trader in Los Angeles describes buy-and-sell activity as "soft and mushy" in recent days. "Everybody's nervous," this trader said.
BUSINESS
February 3, 2009 | Stuart Pfeifer and Tom Petruno
In the 16 years since his release from prison, disgraced junk-bond king Michael Milken has beaten prostate cancer, raised hundreds of millions of dollars for medical research and reshaped an image tarnished by a 1990 conviction for securities fraud. One thing he's been unable to do is win a presidential pardon, despite the support of some of the country's most influential people. Before he left office Jan.
BUSINESS
January 27, 2009 | Tom Petruno
The corporate junk bond market once again is living up to its name, as defaults continue to surge. A total of 15 companies worldwide have defaulted on their bonds this month, triple the total in January 2008, according to Standard & Poor's. The casualties this month include Lyondell Chemical Co., cable TV firm Charter Communications and mattress maker Simmons. All of the 15 were U.S. companies except one: Canadian telecom giant Nortel Networks.
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