Corporate Bond


Definition: a Corporate Bond is a debt security issued by a company.
Corporations issue bonds (among other debt instruments and equity) to finance their business, operations and growth. Bonds are a major part of a corporation's Cost of Debt.
The term CB is normally used for longer-term debt instruments, with a maturity date of at least a year after their issue date.
The term "commercial paper" is used for instruments with a shorter maturity.
Although CB are 'listed' on financial exchanges, most trade in CBs takes place in decentralized, dealer-based, over-the-counter markets.


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