Corporate Bonds
ISIN.net can assist with your corporate bonds and corporate bond offering.
Corporate bonds are debt securities issued by private and public corporations. Companies or funds issue corporate bonds to raise debt capital for a variety of purposes, such as building a new plant, purchasing equipment, or growing the business.
When one buys a corporate bond, one lends money to the “issuer,” the company that issued the bond. In exchange, the company promises to return your money, also known as “principal,” on a specified maturity date. Until that date, the corporation usually pays you a stated rate of interest, generally semiannually. While a corporate bond gives you an IOU from the company, you do not have an ownership interest in the issuing corporationāunlike when you purchase the company’s stock.
Corporate Bond and Exchanges
Corporate bonds are often listed on major exchanges (bonds there are called “listed” bonds) and ECNs, and the coupon (i.e. interest payment) is usually taxable. Sometimes this coupon can be zero with a high redemption value. However, despite being listed on exchanges, the vast majority of trading volume in corporate bonds in most developed markets takes place in decentralized, dealer-based, over-the-counter markets.
Some corporate bonds have an embedded call option that allows the issuer to redeem the debt before its maturity date. Other bonds, known as convertible bonds, allow investors to convert the bond into equity.
Corporate Credit spreads may alternatively be earned in exchange for default risk through the mechanism of Credit Default Swaps which give an unfunded synthetic exposure to similar risks on the same ‘Reference Entities’. However, owing to quite volatile CDS ‘basis’ the spreads on CDS and the credit spreads on corporate bonds can be significantly different.
ISIN.net can assist with your Corporate Bonds.