What is a corporate bond and how is it issued?

A corporate bond is a bond issued by a private company, promising payment of principal and interest, to raise relatively long-term funds for needs such as capital investment.

When it is issued publicly, it is underwritten by a securities firm or similar institution, and a securities registration statement must be filed to protect investors; when it is issued privately, the issuer negotiates the terms directly with the buyers. The issue rate is usually set by adding a credit-based spread to the yield on Korea Treasury Bonds of the same maturity.