These low-rated bonds often move more in tandem with the stock market than the bond market.

Those buying low-rated bonds get relatively little extra yield now, because interest rate spreads over high-quality bonds are small.

And low-rated bonds make up 20 percent of outstanding speculative bonds, more than twice the 1998 level.

First, traders say, there are more sellers than buyers for many of these low-rated bonds.

Indeed, Revlon's low-rated bonds fell by as much as 36 percent yesterday.

But the market for the low-rated bonds started to crumble last summer.

Issuers of low-rated bonds must offer higher interest rates to attract buyers to securities with greater risk.

But the decline did not spill over into the rest of the market for low-rated bonds, where traders called the action quiet.

Nevertheless, the market for the low-rated bonds appeared to have stabilized somewhat after a hectic week of fear and uncertainty.

After a bridge loan deal closes, the firm in essence refinances itself by underwriting high-yield, low-rated bonds on behalf of the client company.