Bonds are considered high yield (or junk) based on the credit ratings they receive from the two major US rating agencies, Moody's and Standard & Poor's. Any bond rated below Baa3 by Moody's or BBB- by S&P is included in the high yield universe. High yield bonds are classified in two ways, as "fallen angels", which are former investment grade bonds that have declined in ratings, and as new issue high yield bonds, which are issued generally by young, growing companies in recapitalizations. The growth of the market has been exceptional. According to estimates by Drexel Burnham Lambert (1989), the size of the market grew.
