Recent studies using aging analysis have found high rates of default for rated, nonconvertible high‐yield bonds. This paper examines the remainder of the market and concludes that rated and nonrated convertible high‐yield bonds had significantly lower default rates. It also provides some evidence that nonrated, nonconvertible securities may have lower default rates. Even after controlling for issue size and coupon rates in a logit model, these differences remain statistically significant.

Recent studies using aging analysis have found high rates of default for rated, nonconvertible high-yield bonds. This paper examines the remainder of the market and concludes that rated and nonrated convertible high-yield bonds had significantly lower default rates. It also provides some evidence that nonrated, nonconvertible securities may have lower default rates. Even after controlling for issue size and coupon rates in a logit model, these differences remain statistically significant.

Recent studies using aging analysis have found high rates of default for rated, nonconvertible high-yield bonds. This paper examines the remainder of the market and concludes that rated. and nonrated convertible high-yield bonds had significantly lower defaul t rates. It also provides some evidence that nonrated, nonconvertible securities may have lower default rates. Even after controlling for issue size and coupon rates in a logit model, these differences rema in statistically significant.