Corporate bonds are debt securities issued by corporations to raise capital. They represent a loan from the investor to the corporation, and the investor receives regular interest payments in return. Corporate bonds are typically issued with a maturity date, which is the date on which the bond matures and the investor is repaid their principal investment. Corporate bonds can be bought and sold on the secondary market, and their prices fluctuate depending on interest rates and the creditworthiness of the issuing corporation.
There are a number of reasons to invest in corporate bonds. First, they offer a relatively stable stream of income. Second, they can help to diversify an investment portfolio. Third, they can provide a hedge against inflation. However, it is important to remember that corporate bonds are not without risk. The value of a corporate bond can decline if the issuing corporation’s creditworthiness deteriorates. In addition, the interest payments on a corporate bond can be suspended or reduced if the corporation experiences financial difficulties.