Because bonds can normally be issued only by large organizations such as nike, apple, ibm, and amazon, they are also known as: corporate bonds.
What is meant by corporate bonds?
Similar to an IOU, a bond is a debt obligation. By purchasing corporate bonds, investors are making a loan to the corporation issuing the bond. In exchange, the business agrees in writing to pay interest on the principal when the bond matures and, in most situations, to return the principal.
A company will issue corporate bonds as a way to raise capital. Investors in corporate bonds are lending the firm money, but the corporation is obligated by law to pay the interest stipulated to bondholders. The corporation pays the bondholder back when a corporate bond matures, which is when the bond's term expires.
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