Corporate bonds are debt securities where the company borrows money from investors, promising to pay interest periodically and repay the principal at maturity. These securities allow companies to fund expansion, operations, or acquisitions while providing investors with steady income through interest payments.

The value and risk of corporate bonds depend on the financial health of the issuing company. Bonds are subject to credit risk, which is the possibility that the company may default on its debt obligations. Investors assess corporate bonds based on the company's creditworthiness, industry outlook, and broader economic conditions.