Investors looking for regular income from bonds may find that two bonds offering similar interest rates can have very different cash-flow patterns. The frequency of interest payments and the timing of principal repayments can affect when and how much money investors receive. Three BBB+ rated corporate bonds currently offer YTMs of up to 11.80%, with monthly and quarterly payouts.
What are BBB+ bonds?
BBB+ rated bonds are debt securities issued by companies that have been assigned a BBB+ credit rating by a credit-rating agency. The rating indicates the agency’s assessment of the issuer’s ability to meet its financial obligations, including interest and principal payments. A BBB+ rating is within the investment-grade category but is below the AA and AAA rating categories. However, a BBB+ rating does not mean the bond is risk-free or guarantees repayment.
1. Finnable Credit – January 2029
Finnable Credit’s January 2029 bond is a BBB+ rated senior secured NCD offering an 11.00% coupon rate with monthly interest payouts. The bond has an 11.75% YTM and 28 months remaining until maturity.
- Minimum investment: ₹9,986.06
- Coupon rate: 11.00%
- YTM: 11.75%
- Interest payout: Monthly
- Principal payout: Structured
- Tenure left: 28 months
- Maturity date: 31 January 2029
- Credit rating: BBB+
- Bond type: Senior Secured
2. Mahaveer Finance – August 2029
Mahaveer Finance’s August 2029 bond is a BBB+ rated secured NCD offering an 11.00% coupon rate with quarterly interest payouts. The bond has the highest YTM among the three at 11.80% and 34 months remaining until maturity.
- Minimum investment: ₹10,112.26
- Coupon rate: 11.00%
- YTM: 11.80%
- Interest payout: Quarterly
- Principal payout: Annual
- Tenure left: 34 months
- Maturity date: 11 August 2029
- Credit rating: BBB+
- Bond type: Secured
3. Manba Finance – November 2028
Manba Finance’s November 2028 bond is a BBB+ rated secured NCD offering a 10.60% coupon rate with quarterly interest payouts. The bond has an 11.00% YTM and 25 months remaining until maturity.
- Minimum investment: ₹1,01,222.23
- Coupon rate: 10.60%
- YTM: 11.00%
- Interest payout: Quarterly
- Principal payout: Quarterly
- Tenure left: 25 months
- Maturity date: 28 November 2028
- Credit rating: BBB+
- Bond type: Secured
Illustrative Returns on Around ₹1 Lakh Investment
| Bond | Tenure Left | Coupon Rate | Approx. Interest Per Payout | Total Amount Received |
| Finnable Credit – Jan 2029 | 28 months | 11.00% | ₹301–₹934 | ₹1,20,203 |
| Mahaveer Finance – Aug 2029 | 34 months | 11.00% | ₹894–₹2,773 | ₹1,21,995 |
| Manba Finance – Nov 2028 | 25 months | 10.60% | ₹297–₹2,788 | ₹1,13,371 |
Note: The figures are based on the respective platform return calculations for investments of around ₹1 lakh. The interest received per payout can vary as principal is repaid in instalments. The YTM may also change depending on the bond’s market price.
What the 11.80% YTM Actually Means
YTM and coupon rate measure different aspects of a bond.
- Coupon rate is the stated annual interest rate on the bond’s face value.
- YTM reflects the annualised return implied by the purchase price, coupon payments and principal repayment if the bond is held to maturity, subject to the assumptions used in the calculation.
Therefore, the YTM should not be interpreted as the monthly or quarterly cash interest rate.
Also Read: 4 AA-Rated Corporate Bonds Offering Up to 10.10% YTM With Monthly Payouts
Factors to Check Before Buying a BBB+ Bond
Investors should look beyond the headline YTM and review the overall structure of the bond.
- Check the latest credit rating and any recent changes to the rating or outlook.
- Review whether the bond is secured and understand the security cover.
- Check how the principal is repaid and whether it is through quarterly, annual or structured instalments or at maturity.
- Check the interest payout frequency to understand when the interest will be received.
- Compare the purchase price with the YTM, as the YTM can change with the bond’s market price.
- Review the bond’s listing and trading activity before investing, as selling before maturity may depend on market liquidity.
- Consider the applicable tax treatment on interest income and capital gains.
Conclusion
The three BBB+ rated bonds have different interest and principal repayment structures. Finnable Credit pays interest monthly with structured principal repayment, while Mahaveer Finance and Manba Finance pay interest quarterly with annual and quarterly principal repayments, respectively. Investors should review the complete payout schedule, YTM, security, rating and liquidity before investing.