Corporate bonds

RECENT NEWS
The Hindu Business Line  Feb 21  Comment 
Domestic rating agency ICRA today said corporate bond issuance is likely to grow by 20—22 per cent in the financial year 2017—18, with gross issuance rising to Rs 8.5 trillion. “Benefiting from finer...
Financial Times  Feb 15  Comment 
Yields for similar debt issued in different euro member states are diverging
Wall Street Journal  Feb 13  Comment 
House Republicans’ plans to let companies repatriate foreign profits and deny deductions on interest could cut into bond issuance.
The Hindu Business Line  Feb 12  Comment 
NSE represented the largest share of trading in corporate bonds at about 81 per cent
Mondo Visione  Jan 30  Comment 
Japan Exchange Group, Inc. reached a resolution at its Board of Directors meeting, held on January30, 2017, on the issuance of corporate bonds as follows. Click here for full details.
Financial Times  Jan 19  Comment 
Central bank has bought more than half the £10bn it can buy under the plan
MarketWatch  Jan 11  Comment 
Broadcom Ltd. completed the largest corporate bond deal of the year on Wednesday, selling $13.55 billion of debt in the latest sign of the strong appetite for investment-grade securities among investors.




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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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