Corporate Bond Offerings

March 1st, 2008

What are corporate bond offerings?

Corporate bond offerings are made when a corporate bond issuer issues particular Corporate Bonds as a form of debt financing for the first time. When a corporation needs to raise cash, it prints certificates and says they are worth an amount of money. These certificates can be Corporate Bonds or stocks. When the certificates are Corporate Bonds, they are called corporate bond offerings. The corporation then sells these Corporate Bonds to the brokers, dealers or the public.

A corporate bond offering is the process of offering the Corporate Bonds to consumers for the fist time. The process can also be referred to as Initial Public Offering.

After corporate bond offerings

Brokers will sell the Corporate Bonds offerings until they are sold out. If you buy the Corporate Bonds at their corporate bond offering price, later you will sell them on the secondary market at a market price which is most likely different from the initial corporate bond offerings.

Corporate Bond offerings by issuers

By issuing Corporate Bonds, companies create an important source of debt financing for plant construction, equipment purchases and working capital to expand their businesses.

Corporate Bonds typically fall into one of the following four industry groups:

Finance bonds issued by banks, financial firms and insurance companies.
Industrial bonds issued by major manufacturing, merchandising and service corporations.
Utility bonds issued by electric, gas, water and telephone companies.
Transportation bonds issued by railroads, airlines and trucking companies.

Corporate Bonds