Corporate Inflation-Linked Securities


DEFINITION of 'Corporate Inflation-Linked Securities'

Corporate debt financing securities that offer their holders protection against fluctuations in the rate of inflation as measured by the consumer price index (CPI). The yields of these securities adjust monthly with respect to the current rate of inflation.

BREAKING DOWN 'Corporate Inflation-Linked Securities'

Although they are not as common as conventional debt instruments, inflation-protected corporate debt can provide an investor with a balanced risk exposure: these securities pose all of the normal risks associated with regular corporate debt securities - such as default risk - but they remove the possibility of inflationary changes eroding their real returns.

  1. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  2. Inflation-Indexed Security

    A security that guarantees a return higher than the rate of inflation ...
  3. Inflationary Risk

    The uncertainty over the future real value (after inflation) ...
  4. Corporate Bond

    A debt security issued by a corporation and sold to investors. ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise ...
  6. Inflationary Psychology

    A state of mind that leads consumers to spend more quickly in ...
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