Corporate Bond

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A corporate bond is a debt security investment, issued by a corporation. The bond should be aligned with obligations of U.S. corporations, and are subsequently sold to investors.

These bonds are taxable and include a maturity date (usually of at least one year).

The purpose behind corporate bonds is usually to raise financing for a corporation.

Backing for a corporate bond is most often derived from the payment ability of the company. Most often, this is money that is expected to be earned from future operations, mergers and acquisitions, or business expansion.

Corporate bonds, as opposed to government bonds, are often considered higher risk. Due to this reason, interest rates are often higher.

These bonds offer a substantial source of capital for many businesses.