A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, M&A, or to expand business. The term is usually applied to longer-term debt instruments, with maturity of at least one year. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations. In some cases, the company’s physical assets may be used as collateral for bonds.
Corporate bonds are considered higher risk than government bonds and as a result, their interest rates are almost always higher, even for highly reputable companies.
We therefore go the extra mile to advise potential investors on the risk exposure for each corporate bond issued so that they can make wise decisions on corporate bonds and avoid losing their capital.