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An agreement between two or more organizations to share risk and responsibility in purchasing or underwriting securities.
A loan larger than the lending limits set by Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). Jumbos usually carry a higher interest rate than conforming loans.
Debt whose holders have a claim on the firm’s assets only after senior debtholder’s claims are satisfied.
A risky bond with a speculative credit rating of BB (Standard & Poor’s) or Ba (Moody’s) or lower. Junk bonds offer investors higher yields than those of financially sound companies, but with substantially higher risk.