Corporate Inflation-Linked Securities

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket ...
  2. Corporate Bond

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

    Extremely rapid or out of control inflation. There is no precise ...
  4. Inflation-Indexed Security

    A security that guarantees a return higher than the rate of inflation ...
  5. Inflationary Psychology

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

    The uncertainty over the future real value (after inflation) ...
Related Articles
  1. The Consumer Price Index: A Friend To ...
    Options & Futures

    The Consumer Price Index: A Friend To ...

  2. Introduction To Inflation-Protected ...
    Options & Futures

    Introduction To Inflation-Protected ...

  3. How long will it take for a bond to ...
    Bonds & Fixed Income

    How long will it take for a bond to ...

  4. What determines the price of a bond ...
    Bonds & Fixed Income

    What determines the price of a bond ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center