VM-21: Requirements for Principle-Based Reserves for ...

h.High-Yield Bonds: High-yield bonds are below investment grade, with NAIC ratings (if assigned) of 3, 4, 5 or 6. Compared to investment grade bonds, these bonds have higher risk of loss due to credit events. Funds predominately containing securities that are not NAIC rated as 1 or 2 (or similar agency ratings) are considered to be high-yield. ................
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