corporate bond

Corporate Bond

Debt securities issued by a for-profit company instead of a government. Corporate bonds are a major way companies raise funds for their operations or for a specific project. The risk of a corporate bond for a bondholder depends on the creditworthiness of the issuing company. As with all bonds, corporate bonds have a maturity, at which time the principal is repaid to bondholders. They also usually have a stated coupon rate. Corporate bonds are taxable.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Corporate bond.

Corporate bonds are debt securities issued by publicly held corporations to raise money for expansion or other business needs.

Corporate bonds typically pay a higher rate of interest than federal or municipal government bonds, but the interest you earn is generally fully taxable.

You may be able to buy corporate bonds at issue through your brokerage firm, usually at the offering price of $1,000 per bond, though you may have to buy several bonds of the same issue rather than just one.

You can buy bonds on the secondary market at their current market price, which may be higher or lower than par. However, most individual investors buy corporate bonds though a mutual fund that specializes in those issues.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

corporate bond

see BOND.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005