Corporate bonds are debt securities issued by companies to raise capital. When investors buy these bonds, they are essentially lending money to the company in exchange for periodic interest payments and the return of the bond's face value at maturity. Corporate bonds can vary in terms of risk and return, depending on the issuing company's creditworthiness. Investors often consider corporate bonds as a way to diversify their portfolios and earn income. The interest rates on these bonds are typically higher than those of government bonds, reflecting the increased risk associated with lending to a corporation. Ratings from agencies like Moody's or Standard & Poor's help assess the credit risk of corporate bonds.