Investors buy bonds for security as well as income. When a company goes bust, the bondholders have an early claim on the business's remaining assets-a much better claim than shareholders do.rnIn this recession, however, defaults are clobbering everyone. In many recent bankruptcies, prices on unsecured bonds suggest holders will be left with less than ten cents on the dollar (see table on next page). Even secured bondholders, whose claims are backed by specific assets, would get back just over 15 cents. In the pre-crisis world, bondholders tended to get a recovery rate of more than 40 cents, analysts say.
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