Many corporations issue (or float) bonds to borrow money for operations. Bonds are typically issued at $1,000 par. Par is another word for "face amount."

Long-term corporate bonds mature in 10 to 40 years. They generally pay interest semi-annually (twice a year). Many bonds may be recalled prior to maturity by the issuer.

If a corporation goes bankrupt, bondholders (and stockholders, too) can claim its assets. Bondholders receive assets after the IRS but before stockholders.

Some corporations issue bonds for less than their par values. When they repay the bonds at maturity, the investors receive the face values.

The interest on bonds is stated as a percentage of par value.

Bond prices are quoted on $100 even though their face amount is usually $1,000. For example, a quote of 85 indicates a bond selling for $850. Amounts less than $10 are quoted in eighths. An eighth is equal to $1.25. A quote of 80 1/8 is $801.25 ($800 + $1.25).

Various rating services rate corporate bonds for their safety.