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A corporate bond is a debt security issued by a company that generally pays higher interest than a government bond, but in return carries a higher default risk.
Corporate bonds are issued by companies and generally offer higher interest rates than government bonds of the same maturity. The difference (credit spread) compensates for the higher default risk.
Investment-grade corporate bonds (BBB or better) are considered relatively safe. High-yield corporate bonds offer significantly higher interest but carry significant default risk.
For retail investors, corporate bonds are best accessed via ETFs, since individual bonds often require high minimum investments (from 1,000 to 100,000 EUR).
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