Definition of Corporate bond:
Bond issued by a firm, not by a government or municipality.
A corporate bond is a type of debt security that is issued by a firm and sold to investors. The company gets the capital it needs and in return the investor is paid a pre-established number of interest payments at either a fixed or variable interest rate. When the bond expires, or "reaches maturity," the payments cease and the original investment is returned.
The backing for the bond is generally the ability of the company to repay, which depends on its prospects for future revenues and profitability. In some cases, the company's physical assets may be used as collateral.
How to use Corporate bond in a sentence?
- I was interested in a corporate bond because I did not trust the government and didnt want anything to do with them.
- Buying a corporate bond can be a great investment because it should be very low risk and almost a guarantee.
- The highest quality (and safest, lower yielding) bonds are commonly referred to as "Triple-A" bonds, while the least creditworthy are termed "junk".
- A corporate bond is debt issued by a company in order for it to raise capital.
- An investor who buys a corporate bond is effectively lending money to the company in return for a series of interest payments, but these bonds may also actively trade on the secondary market.
- Some companies will put out a corporate bond and they can be a very good and low risk investment opportunity.
- Corporate bonds are typically seen as somewhat riskier than U.S. government bonds, so they usually have higher interest rates to compensate for this additional risk.
Meaning of Corporate bond & Corporate bond Definition