Who was known as the 'Junk Bond King' in the 1980s?

Michael Milken was known as the “Junk Bond King” in the 1980s.

Milken became the leading figure in the high-yield bond market while running Drexel Burnham Lambert’s bond operation. He helped popularize the use of bonds rated below investment grade to finance leveraged buyouts, corporate expansion, and other transactions. These securities became widely known as junk bonds because they carried higher default risk but offered higher yields.

His network of investors made it possible to raise large sums quickly, helping fuel the leveraged-buyout boom of the 1980s. Milken’s compensation became extraordinary; his income reportedly exceeded $1 billion over a four-year period, a record at the time.

The nickname does not mean Milken invented all high-yield bonds. Earlier markets existed, and academic work had already examined their risk and return. His importance came from building a powerful distribution and financing system around them. In 1989, he pleaded guilty to securities-law violations, received a prison sentence and a large fine, and later became a major philanthropist.