Corporate bond rates are only of interest to individuals who engage in the trade and sale of these corporate bonds. Corporate bond quotes which list the corporate bond rates are given when the corporate bond is initially issued.
Corporate bond rates are affected by the fact that corporate bonds, even one issued by a well-established pillar of the community, carry a higher risk of default than many of the other kinds of bonds. As a result the corporate bond quotes issued when soliciting purchasers of these bonds are forced to issue higher rates in order to justly compensate investors for taking these risks.
However, not all corporate bond quotes carry the same risk. Depending on the corporation that issued the bond, the current market conditions, the government against which the corporate issuer is being compared, and the rating assigned to the company, the corporate bond rates can vary widely. However, once the bond is issued, the corporate bond rates are only significant for individuals who attempt to buy these corporate bonds through an exchange or in direct, over the counter purchases. Since corporate bond quotes vary, individuals trading bonds may attempt to exchange corporate bonds in order to find one with a more favorable rate.
Corporate bond rates may be judged based on the value of the corporate bond’s coupons.