What is the definition of corporate bonds?

1. What is the definition of corporate bonds? Corporate bonds refer to securities issued by the company in accordance with legal procedures and agreed to repay the principal and interest within a certain period of time. Corporate bonds are the manifestations of corporate bonds. Based on the issuance of corporate bonds, a legal relationship of creditor's rights and debts is formed between bondholders and issuers with the content of repaying principal and interest. Therefore, corporate bonds are debt certificates issued by companies to bondholders. For issuers, issuing corporate bonds is a major social financing behavior to sell credit to social investors and increase liabilities. The company law of almost all countries stipulates that the issuance of corporate bonds requires the approval of the company's decision-making bodies, such as the board of directors and the shareholders' meeting. The management of the company shall not decide to issue corporate bonds without authorization, and the funds raised shall not be used to repay bank loans. As far as government regulators are concerned, the issuance of corporate bonds involves great social credit, which has a great impact on stabilizing social and economic order and safeguarding investors' rights and interests. Therefore, the company law of almost all countries stipulates that the issuance of corporate bonds must be approved or recognized by the relevant government regulatory agencies, or registered with the government regulatory agencies, otherwise it is illegal. Therefore, "according to legal procedures" mainly contains two meanings: (1) it needs to be approved by the company's decision-making level, such as the board of directors and the shareholders' meeting; (2) It needs the approval of the government supervision department. In the process of approving the issuance of corporate bonds, the government regulatory authorities also impose strict requirements on credit rating, financial audit, legal certification and information disclosure through relevant laws and regulations. 2. What conditions do listed companies need to meet when issuing bonds? The purpose of corporate bonds is to raise funds for production and operation, and at the same time safeguard the interests of investors, so that the company issuing bonds can repay the principal and interest at maturity. Therefore, the issuance of corporate bonds must meet the following conditions: 1, the net assets of joint stock limited companies are not less than RMB 30 million, and the net assets of limited liability companies are not less than RMB 60 million. 2. The total amount of accumulated bonds shall not exceed 40% of the company's net assets. 3. The average distributable profit in the last three years is enough to pay the interest of corporate bonds for one year. 4. The investment of raised funds conforms to the national industrial policy. 5. The bond interest rate shall not exceed the interest rate level stipulated by the State Council. 6. Other conditions stipulated by the State Council. The funds raised from the issuance of corporate bonds must be used for the purposes determined when the issuance is approved, and may not be used to make up for losses and unproductive expenditures. This is an important condition for issuing corporate bonds. The purpose is to use the raised funds correctly and effectively, maintain and enhance the company's solvency and protect the interests of creditors. After issuing corporate bonds, those who can maintain the conditions for issuing bonds and gain the trust of investors can issue corporate bonds again, which is conducive to raising funds for the company. If a company that issues corporate bonds fails to gain the trust of investors and confronts creditors, its re-issuance of corporate bonds will be restricted. Therefore, under any of the following circumstances, corporate bonds may not be issued again: 1. Previously issued corporate bonds have not been fully raised. 2. The company defaults on the issued corporate bonds or its debts or delays the payment of principal and interest, and it is still in a continuous state. Now, as long as the economic conditions permit, people basically don't put their inherent assets in the bank, because compared with the same period last year, in fact, only the bank gives the lowest interest on regular storage, but putting money in the bank is less risky than buying corporate bonds or doing other investment and wealth management projects. You should know more about corporate bonds before buying them.