Understanding Corporate Bond Risks and Yields
Risk and yield Making interest payments and returning capital at maturity will depend on the financial ability/creditworthiness of the issuing company to do so. Adverse financial conditions or weakening operating performance of the issuing company could affect its ability to make interest payments or to return capital at maturity. If Continue Reading →
Shares Vs. Bonds
Unlike dividend payments to shareholders, interest payments to bondholders by the issuer are contractual obligations and as such do not depend on the issuing company having available profits, or the company board approving interest payments. Upon maturity, the bond issuer is also required to return the capital by paying the Continue Reading →
Assessing the Creditworthiness of Corporate Bond Rates
To assist investors determine the risks of investing in a particular bond issue, rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings conduct research into many of the corporate bond issues available to institutional investors. Through this research, which includes assessing the financials of the issuing company and Continue Reading →