How to read the financial pages

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Corporate bonds are bonds issued by companies as a way of raising capital, and are an alternative to issuing shares in the equity markets.

Like government bonds, they pay interest to their holders, are redeemable on a certain date at a fixed price, and are traded in open markets.

As a general rule, corporate bonds pay a higher coupon than government bonds because they are seen to be more risky.

The creditworthiness of the issuing company is a crucial factor in determining what coupon it has to pay to raise money (the infamous 'junk bonds' were bonds issued at high coupons by companies that otherwise found it difficult to raise money).

Rating agencies like Moody's, Standard & Poors and Fitch help investors by giving companies (and indeed governments) a credit rating from AAA (very safe) to D (risky).

Limited information on corporate bonds appears on the Capital Markets page of the FT every day.

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