Interest on junk bonds is higher than other similar bond products

The term "junk bond" refers to bonds issued by companies below the standard and poor company BB or the company's BA level. Because these companies have higher risk ratings, the interest on junk bonds is higher than that of other similar bonds. In 1991, a book called "The Thief's Nest" won the Pulitzer Prize, describing the story of how Wall Street's four bankers used insider information to manipulate the market and invest in junk bonds illegally profiting. One of the archetypes of the book is the Milken, known as the "King of junk bonds."

The story of Milken and de-Sung securities is a true legend, like the mythical half-man character in Greek mythology, who is the god of the "junk bonds" kingdom, who pioneered the junk bond market and financed small and medium-sized businesses with underwriting junk bonds.

The Book of Thieves ' nests describes the greedy, dark side of mill. So, the king of junk--the rice investment saga--reveals his other side: cleverness, diligence, clear goals, and courage. In the 80 's, U.S. companies issued more than 170 billion of dollars in junk bonds, and the company, known as the "King of junk bonds," issued 80 billion dollars, accounting for 47%. During the 10, Milken converted from a second-rate brokerage to a world-class investment bank. The company earned more than 4 billion dollars in 1987, the highest-earning company on Wall Street. In 1986, Milken's personal annual income amounted to $550 million trillion, or even more than the Securities and Exchange Commission's annual budget.

In addition to the success of digging up the investment value of junk bonds, Milken's achievements have come more from his underwriting of High-yield bonds, raising funds for start-ups and even high-risk companies, and even leveraging takeovers of "snake-swallow Elephants". In the 80 's, the United States had a huge wave of mergers and acquisitions, but as a second-rate securities firm, it could not compete with big investment banks such as Goldman Sachs.

Milken is eyeing the field of leveraged buy-outs, where the "mezzanine capital" needed in leveraged mergers is actually unsecured junk bonds, which is what Milken is best at. With more than half of his share of the junk bond market, he has broken into leveraged buy-outs, becoming a headache for top investment banks such as Goldman Sachs and Morgan Stanley.

Leveraged buy-outs have made America's technological wave in the 80 's, especially for the development of the fiber industry and the mobile communications industry. The classic case of Milken is that cooperation with MCI sent a takeover offer to T, the world's largest snack company. Although the takeover failed, Milken a 2 billion-dollar junk bond for MCI, successfully breaking T's monopoly on the long-distance telephone market.

Milken's keen and daring character has made his kingdom a success, and thus doomed his failure. In 1989, Milken and his brother were charged with a total of 98 charges, including securities fraud, after more than a year of trial, still unable to confirm their market manipulation and other key charges. In 1990, the court finally ruled that Milken was guilty of covering up a stock position, helping the client evade taxes and so on amounted to 6 counts, 10 years in prison and a fine of $1.1 billion. And almost at the same time, the Wall Street Journal called it "the greatest financial thinker".