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Corporate Bonds
A corporate bond is a type of debt security issued by a corporation to raise capital. When an investor buys a corporate bond, they are essentially lending money to the company in exchange for periodic interest payments (called coupon payments) and the return of the principal amount at the bond’s maturity date.
Key Features of Corporate Bonds:
- Issuer: Corporations issue these bonds to fund business operations, expansion, acquisitions, or refinance existing debt.
- Interest Payments: Most corporate bonds pay interest at a fixed or variable rate, typically semiannually.
- Maturity Date: The date when the corporation repays the principal amount to the bondholder.
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