Safety in Troubled Times: Corporate Bonds

Evan Liberman Articles, Corporate, Ideas 1 Comment

In these troubling economic times, it is wise to invest in solid, investment grade bonds which have a reasonable rate of return. Solid corporate bonds provide a better rate of return than Government bonds, with some more risk. With interest rates on the rise in Israel, buying adjustable interest rate corporate bonds should prove to be a good strategy, as the bond's coupon rate (effective yield) will rise as the government increases interest rates. Here are some ideas for adjustable-rate corporate bonds you can look into:

Suggested adjustable-rate corporate bonds

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Current Yield to Maturity, the best measure of real rate of return, and other even more bond details, can be viewed using the Google-translated Bank Leumi website (the translation to English is problematic).

Ratings

There are two internationally-recognized bond rating agencies that examine Israeli companies' ability to repay their debts: Standard and Poor's and Moody's. Listed below is the meaning of each of their rankings. The S&P's rank can add a fine tuning of + or -; Moody's can add a fine tuning of 1,2 or 3 to better rank a bond within a specific category.

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More details on the companies above

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