What are corporate bonds?

Corporate bonds can be a very lucrative investment. Some guys made their luck with corporate bonds.

Corporate bonds ("corporates") are debt-obligations issued by a private or public corporation. Usually companies issue bonds for expanding their business or to purchase equipment. Other reason can be a merger or acquisition.

Buying bonds means that investor lends money to the company with the promise that the money is returned to a specific date. Until that the company, the borrower, pays a rate of interest to the investor, the lender. Unlike stocks, bonds do not give investor an ownership interest in the issuing company.