Discarded assets that are considered useless or of little value. During most periods, so-called junk bonds (lower credit quality, higher-yielding bonds) have given investors a net rate of return two percentage points higher than the rate that could be earned on “investment grade,” bonds with high-quality credit ratings. 
The value of speculative bonds is affected to a higher degree than investment grade bonds by the possibility of default. For example, in a recession interest rates may drop, and the drop in interest rates tends to increase the value of investment grade bonds; however, a recession tends to increase the possibility of default in speculative-grade bonds.
In a leveraged buyout (LBO) an acquirer would issue Junk bonds to help pay for an acquisition and then use the target's cash flow to help pay the debt over time. 
From 1842, old or discarded articles of any kind.