Corporate bonds

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Wall Street Journal  Apr 14  Comment 
Investors are hunting for bargains in European corporate bonds after a decline in prices from the ECB’s stimulus program.
Financial Times  Apr 7  Comment 
Some of country’s biggest companies struggle to pay debts
USAToday.com  Mar 29  Comment 
The market for green bonds to finance clean, efficient energy projects tripled last year.
The Hindu Business Line  Mar 23  Comment 
The huge supply of government securities (G-secs) is a major hindrance for the growth of the corporate bond market, according to Reserve Bank of India Deputy Governor R Gandhi.Government...
Financial Times  Feb 15  Comment 
Signs of distress are appearing in companies’ debt
Financial Times  Feb 6  Comment 
Borrowers shrug off lacklustre start to the year




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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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