Corporate bonds

RECENT NEWS
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.
The Economic Times  Jan 4  Comment 
Trading worth Rs 10.50 lakh crore in corporate bonds were reported on the two bourses during 2015, latest data available with the Sebi showed.
The Economic Times  Jan 2  Comment 
The company will sell five-year bonds at 7.77%, the company said in a notification to stock exchanges.
Mondo Visione  Dec 20  Comment 
In order to further standardize the information disclosure of corporate bonds and protect investors’ legitimate rights and interest, the Shanghai Stock Exchange (SSE) has formulated the “Format Instruction on Information Disclosure for...
Financial Times  Dec 4  Comment 
Expansion plans are in question after a focus on dividends and share buybacks
Mondo Visione  Nov 29  Comment 
2016: Another record-breaking year in number and volume of corporate bonds Vienna gaining significance as a trading venue for international bonds Over 450 corporate bonds issued by 220 companies traded in Vienna  Admissions to...
Financial Times  Nov 15  Comment 
Pfizer completes $6bn sale but recent volatility weighs on interest




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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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