High-yield debt

High-yield debt is like asking your parents for extra money to buy a toy that's more expensive than what you usually get.

When companies or governments need more money than they have, they may borrow it by selling bonds to people who want to invest. High-yield bonds are those that promise a higher interest rate to investors than other bonds because the company or government that borrows the money has a higher risk of not being able to pay it back.

Think of it like a friend who is not very good at keeping their promises or paying back their debts. Because of this, you might not want to lend them money or you would only do it if you got a higher return as a reward for taking the risk of not being paid back.

When investing in high-yield bonds, investors have to take on more risk, but if everything goes well, they can make more money. However, if the company or government fails to pay back the bond, the investors could lose their money.

Overall, high-yield debt can be a way for companies and governments to raise money they need to do important things, but it's riskier than other types of debt, so investors should be aware of the chances of not getting their money back.