Corporate Bonds

Archive for March, 2008

Question: buying Corporate Bonds?

Is the only thing to worry about, is the company declaring bankruptcy?
I see a R.J. REYNOLDS TOBACCO HOLDINGS bond. Its rated Baa3.
Why so low? I would not think they will declare bankruptcy.
Anything else to worry about?
CUSIP:
76182KAH8

Answer: if you provide us with the cusip number, i’ll be happy to research the bond for you. I’ll check back in a bit.

My friend, i came back to the site, as i said i would. I entered your cusip number twice in my trading account and could not get a hit. I’m very sorry. Baa3 in at the bottom of the rating category, in that class. I would just review there balance sheet, listen to their most recent earnings call and get a sense of where the company is headed. Again, i’m sorry I could not help you.

Cumulative probability of default on risky bond

Question: Investing in Single Bonds as a Small Time Investor?

Is there anyplace where a small investor can buy bonds? And I don’t mean I-Bonds or any of those direct Government treasuries. But I mean Corporate Bonds that might be yielding 8% or 12%?? Can you buy just (1) Corporate Bond?

Answer: Of course. Many brokerages support this. However, it used to be that it was quite difficult for an individual investor to get a good deal on buying a bond (and difficult to even find out much about availability and prices). Recently this has gotten easier with the new MarketAxess system — Fidelity was one of the big adopters of this system. So if you’re interested in buying individual bonds in particular, before you select a broker first check out the extent of their bond tools and access to individual bonds.

However, it’s hard to diversify your risk as a individual investor in bonds, unless you have substantial funds, so bond mutual funds is still a better choice for most people. Plus it’s still just plain easier.

http://www.bondsonline.com/News_Releases/news11260601.php

Bond Outlook: Corporate Bond Sales Soar to $41 Billion, Highest in Eight Months