Corporate bonds are debt obligations, issued by corporations. When you buy a bond, you are actually lending money to the corporation that issued it, which promises to return your principal, on a specified maturity date. Until that time, they pay you a stated rate of interest; whether monthly, quarterly or semi-annually. Of course, the income interest you receive from corporate bonds is taxable.

 

Corporate debt is usually traded in the over-the-counter (OTC) market. The OTC market is much larger than the exchange market and most corporate bonds transactions, even those involving listed issues, take place in the OTC market.

 

The corporate bond market is large and liquid, with daily trading volume estimated at $10 billion. The total market value of outstanding corporate bonds in the United States is approximately $2.1 trillion.

 

Investors in corporate bonds range from large financial institutions, state and local pension funds, to individuals and IRA accounts. 

 

High yields: Corporates offer much higher yields than government bonds or CDs of comparable maturities.

 

Safety: Corporate bonds are evaluated and assigned a rating based on credit history and ability to repay obligations. The higher the rating, the safer the investment. Debt obligations of Blue Chip companies are considered to be the most secure corporate investments.

 

Diversity: Corporate bonds are available in a variety of sectors, structures and credit-quality characteristics to meet almost any client's investment preferences.

 

Liquidity: Due to the size and liquidity of the market, investors have little trouble selling their corporate bonds in the open market.

 

If you are interested in Corporate Bond Offerings, please click the Taxable Offerings tab. If you do not see the investment products you are interested in, please email us at sales@stoeverglass.com or call us at 1-800-223-3881 and a Stoever Glass representative will be glad to assist you. 

A very tiny portion of municipals are taxable debt obligations. They are an outgrowth of the Tax Reform Act of 1986, which put certain restrictions on the issuance of traditional Tax-Exempt Securities. A taxable Municipal Bond is issued as a Private Purpose Bond to finance Public Purpose projects where the 10% private use limitation has been exceeded.

 

After the financial crisis in 2008, the Federal Government came up with a program for one year where municipalities could issue taxable bonds where the Federal Government would subsidize 35% of the interest on these bonds. These bonds are known as Build America Bonds and were only issued between January and December of 2010. Essentially these bonds are the same as every other taxable municipal bond as the 35% subsidy was not allocated to the bonds.

 

Do you have questions about a municipal bond, corporate bonds or any of the investment products that we provide to clients? Please feel free to call any Stoever Glass representative at 1-800-223-3881.

U.S. government agencies issue investment products such as bonds to finance activities supported by public policy. These agencies include the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank, to name just a few. These issuers make credit available to sectors of the economy that may not otherwise be able to afford the costs of financing

Although these agencies are not backed by the same "full faith and credit guarantee" as Treasuries, their credit quality is generally considered excellent because of their government-sponsored status. However, the Government Agencies offer much higher yields than Treasuries. This market functions with an excellent level of efficiency and liquidity due to the high degree of demand. Interest received from these investment products is subject to federal income taxes, and exemption from state taxes varies from agency to agency.

 

If you are interested in Federal Bond Offerings, please click the Taxable Offerings tab. If you do not see the securities you are interested in, please email us at sales@stoeverglass.com or call us at 1-800-223-3881 and a Stoever Glass representative will be glad to assist you.