Issuing bonds is one way for companies to raise money. A bond functions as a loan between an investor and a corporation. The investor agrees to give the corporation a certain amount of money for a specific period of time. In exchange, the investor receives periodic interest payments.

The bond issuing process involves several key players. These include the issuer (the entity needing funds), underwriters (usually investment banks that help structure the bond offering and market the bonds), bondholders (investors purchasing the bonds), and regulatory authorities overseeing the process to ensure legal compliance.

Borrowers issue bonds to raise money from investors willing to lend them money for a certain amount of time. When you buy a bond, you are lending to the issuer, which may be a government, municipality, or corporation.

Companies can issue corporate bonds when they need to raise money. For example, if a company wants to build a new plant, it may issue bonds and pay a stated rate of interest to investors until the bond matures. The company also repays the original principal.

Investors who buy corporate bonds are lending money to the company issuing the bond. In return, the company makes a legal commitment to pay interest on the principal and, in most cases, to return the principal when the bond comes due, or matures.