The main purpose of corporate bonds is to help companies raise additional cash, without having to borrow from a bank, sell equity — that is, issue more stock shares —  or seek out venture capitalists.  "Companies issue bonds to raise cash to bolster their balance sheets or re-invest in a particular project or expansion plan, " says Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdow. "Investors who buy corporate bonds are lending money to the company, in the same way as investors who buy government bonds like US Treasuries or UK Gilts are lending money to governments to finance public spending." Bondholders are entitled to two sources of income: The regular interest installments, usually paid annually or semi-annually. Most bonds pay a fixed interest rate, but variable-rate, or floating, bonds exist too. These are usually based on a benchmark, such as a bond index or prevailing Treasury rate. A full repayment of the principal after the bond's term ends. Corporate bonds generally have maturities from three years to 10, though they can be shorter or longer. After they're issued, corporate bonds trade on stock exchanges, in the secondary bond markets. Investors can always choose to sell a bond at market price before it matures. This move may be profitable if interest rates, in general, have declined since the bond was issued: A fall in interest rates sparks a rise in bond prices — because that bond is paying a now higher-that-average rate.