Corporate bonds

RECENT NEWS
Financial Times  Mar 28  Comment 
Companies delayed deals after political wrangling fuelled volatility
Benzinga  Mar 24  Comment 
New York-based technology provider, Trumid, announced it recently closed a deal with its competitor Electronifie. The deal is expected to close in the early second quarter of 2017. Both companies deliver technology focused on the corporate bond...
The Hindu Business Line  Mar 23  Comment 
India Index Services and Products (IISL), an NSE group company, has launched a series of six AAA-rated corporate bond indices for the Indian bond markets. The Nifty AAA Corporate Bond Index series c...
Clusterstock  Mar 16  Comment 
It is hard to imagine today, but in the not so distant past, there was a lively debate regarding the usefulness of electronic trading in the corporate bond market. Gradually, as key developments like the introduction of List RFQs by...
Mondo Visione  Mar 7  Comment 
A report published today by the Board of the International Organization of Securities Commissions (IOSCO) has found no substantial evidence showing that liquidity in the secondary corporate bond markets between 2004 and 2015 has deteriorated...
Wall Street Journal  Mar 1  Comment 
An unusual shift is under way in U.S. and European corporate bond markets—politics on both sides of the Atlantic are the reason.
Mondo Visione  Feb 27  Comment 
FINRA today launched its new Academic Corporate Bond TRACE Data product, an enhanced historical data product available solely to institutions of higher education. The product supports and encourages academic research on corporate bonds by...




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A corporate bond is a bond issued by a corporation. It is a bond that a corporation issues to raise money in order to expand its business. The term is usually applied to longer-term debt instruments, generally with a maturity date falling at least a year after their issue date. (The term commercial paper is sometimes used for instruments with a shorter maturity.) Sometimes, the term "corporate bonds" is used to include all bonds except those issued by governments in their own currencies. Strictly speaking, however, it only applies to those issued by corporations. The bonds of local authorities and supranational organizations do not fit in either category.

Corporate bonds are often listed on major exchanges (bonds there are called "listed" bonds) and ECNs like Bonds.com and MarketAxess, 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.

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