Corporate Bonds
Corporations can issue bonds to raise liquid capital. Bonds are fixed-income debt instruments: the issuing corporation receives cash immediately, then pays periodic coupon interest to bondholders until the bond matures, at which point the full face value is returned.
Issuing a Bond
Only the CEO can issue bonds. Access the bond panel from the corporation page.
| Parameter | Details |
|---|---|
| Minimum issuance | $100,000 |
| Maximum total debt | 2× equity |
| Unit face value | $1,000 per bond unit |
| Maturity options | 48 turns (1 game year), 96 turns (2 years), 240 turns (5 years) |
| Coupon rate | Automatically set: prime rate + credit spread |
| Issuance cooldown | Fixed turns between issuances (set on corporation) |
The proceeds go directly to corporate liquid capital. Bond units enter the public float and can be purchased by any player or corporation.
Credit Rating and Coupon Rate
Your corporation has a credit rating (0–100 composite score) based on:
- Debt-to-equity ratio
- Interest coverage ratio (operating income vs. interest payments)
- Profitability
- Liquidity (liquid capital level)
The credit spread added to the prime rate reflects this score. A highly profitable corporation with low debt pays a coupon close to the prime rate. A heavily indebted or loss-making corporation pays a significantly higher spread.
If your corporation has previously defaulted on a bond, a credit penalty applies for a set number of turns, pushing the spread higher.
Per-Turn Coupon Payments
Each turn, the bond pays a fraction of its annual coupon to all current bondholders:
perTurnPayment = (faceValue × couponRate / 100) / turnsPerYear
For a $100,000 bond at 8% coupon rate with 48 turns per year:
- Annual coupon: $8,000
- Per-turn payment: $8,000 / 48 ≈ $166.67
Payments are made from corporate liquid capital. If the corporation's liquid capital falls below zero after coupon payments, the bond defaults.
Bond Market Price
Bond market prices fluctuate based on the current prime rate and time to maturity:
price = (couponPayment / (currentPrimeRate / 100 × faceValue)) × faceValue
Key relationship:
- When prime rates rise, existing bond prices fall (your fixed coupon is worth less relative to new issuances)
- When prime rates fall, existing bond prices rise
As a bond approaches maturity, its price converges toward par (1.0 × face value), regardless of rate movements. This pull-to-par effect dampens price volatility for bonds near maturity.
Buying and Selling Bonds
Any player or corporation can buy bond units from the public float:
- Players: Payment from personal cash. Coupon payments received as personal income each turn.
- Corporations: Payment from liquid capital. Coupon payments received as corporate income. Add
?corporationId=to buy for your corporation.
CEOs can also:
- Buy back their own bonds to reduce outstanding debt
- Retire defaulted bonds at face value ($1,000/unit) — the "Retire Debt" panel on the bond detail page reduces debt gradually without triggering a full settlement
Default
A bond defaults when the corporation cannot cover its coupon obligations — specifically, when liquid capital goes negative after payment is processed. On default:
- Bondholders receive no payment that turn
- The corporation's credit rating takes a penalty for a set number of turns
- Defaulted bonds can still be traded on the open market at distressed prices
- CEOs cannot buy their own corporation's defaulted bonds (prevents self-dealing)
Distressed bond speculators can buy defaulted bonds cheaply and wait for the CEO to retire them at face value, making a profit on the spread.
Bond Holdings
From your corporation page (Bonds tab) you can see:
- Bonds your corporation has issued (outstanding debt)
- Bonds your corporation holds in other companies (investment portfolio)
The portfolio view shows issuer names, units held, and current market values.
Strategic Considerations
When to issue bonds:
- Fund rapid expansion — cheap debt is better than diluting equity if your credit rating is strong
- Bridge a temporary cash crunch while revenue catches up to growth costs
- Finance HQ relocation (cross-country moves cost 14% of market cap — a 7-year relocation bond is offered as an alternative payment method)
When to buy bonds:
- Steady income with minimal management — coupon payments arrive each turn automatically
- Rate speculation: buy long-duration bonds when rates are high (prices are depressed), profit when rates fall and prices rise
- Distressed debt: buy defaulted corporate bonds cheaply, wait for CEO buyback at face value
Watch the prime rate: The Central Bank Chair sets the prime rate each turn they act. Rate changes ripple directly into all bond market prices.
See also: Corporations, Sovereign Bonds, Central Banks, Stock Market