why corporations sell bonds
corporate bonds are a form of debt financing they are a major source of capital for many businesses along with equity bank loans and lines of credit they often are issued to provide the ready cash for a particular project the company wants to undertake debt financing is sometimes preferable to issuing stock equity financing because it is typically cheaper for the borrowing firm and does not entail giving up any ownership stake or control in the company generally speaking a company needs to have consistent earnings potential to be able to offer debt securities to the public at a favorable coupon rate if a company s perceived credit quality is higher it can issue more debt at lower rates 