How to Buy Corporate Notes

Corporate notes are another name for corporate bonds. They are available for sale directly through the corporation selling them or through a financial institution.

Features

Most corporate bonds are sold in increments of $1,000 with a fixed interest, or coupon, and typically have short to medium length maturity dates. As with bonds, corporate notes pay semi-annual interest payments for the notes. Corporations issue notes to raise capital for company use, either for paying debt or expanding operations.

Risk

Corporate notes and bonds have some risk involved in purchasing them. They are not backed by the Federal Deposit Insurance Company (FDIC), but if a corporation is in healthy shape, the risk they will default is relatively low. Corporate notes typically pay interest rates slightly higher than those offered by the U.S. Treasury.

Purchase

To purchase corporate notes, any financial institutions selling securities can sell them. Corporate notes however, can be purchased directly through the corporation that is selling them.

References

• Investment News: Corporate Notes for the Public Gaining Favor
• Incapital: Corporate Notes
• Bondtrac: Corporate Notes and Bonds