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Corporate Bond
A corporate bond is a type of debt security that is issued by a corporation to raise capital. Corporate bonds pay periodic interest to bondholders and return the principal when the bonds mature. Corporate bonds are typically issued in denominations of £1,000 and have maturities that range from a few years to 30 years.
Examples of companies that have issued corporate bonds include Apple, Microsoft, Ford, and General Electric. Corporate bonds can be an attractive investment option for those seeking a steady stream of income, as they offer higher returns than Treasury bonds or other types of fixed-income securities.
Here are a few examples of UK companies that have issued bonds:
- British American Tobacco (BAT)
- Royal Dutch Shell
- GlaxoSmithKline
- Vodafone Group
- National Grid
- BP
- Tesco
- Rolls-Royce Holdings
- Rio Tinto
- Anglo American
- Barclays
- BT Group
- HSBC Holdings
The size of the global market for corporate bonds is difficult to quantify as it is constantly changing, but it is estimated to be in the trillions of dollars. As of 2021, it is estimated that the global market for corporate bonds was worth approximately $10 trillion, with the majority of bonds issued by companies in the United States, Europe, and Asia. The corporate bond market has been growing steadily in recent years, reflecting the increasing demand for alternative sources of financing by companies and the desire by investors to diversify their portfolios. The market is expected to continue growing in the coming years, driven by the increasing need for financing by companies, particularly in emerging markets, and the desire by investors for yield in a low-interest-rate environment.