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Understood. Targeting 12%+ in the 2-3 year bracket often means exploring high-yield bonds or instruments with ratings around A- to BBB-. Are you comfortable with those ratings?
The rating reflects a company’s past health. At BondScanner, we also check various other metrics to help identify the company’s current health and future performance.
I’ve read that rising interest rates can hurt bonds. Given my 2-3 year target, should I be more worried about interest rate volatility than I am about the specific company’s credit profile?
While it’s true that bond prices fluctuate with interest rate movements, the key advantage of holding a bond to maturity is that your returns, the coupon payments and the yield you locked in, remain fixed.
If you invest in a bond today and hold it until maturity, short-term market volatility or interest rate changes won’t affect your actual return, as long as the issuer doesn’t default.
The only time your coupon or yield may change is if the bond has a variable or step-up/step-down coupon structure.
So, with a 2–3 year horizon and if you plan to hold the bond to maturity, interest rate volatility matters less than the credit quality of the issuer.
You can check all these metrics, from the coupon rate to the various credit ratings, directly on the BondScanner platform.
If you want further assistance, please reach out to us directly via our official WhatsApp number: +91 9380740546
Hi Krishna.
A step-up or step-down coupon refers to a feature in some bonds where the coupon rate changes based on predefined conditions mentioned in the term sheet, often linked to the issuer’s credit rating or specific covenants.
Typically, the term sheet outlines certain financial, security, or performance covenants. If these covenants are breached, or if the issuer’s credit rating is downgraded, the coupon rate may “step up”, meaning it increases by a specified number of basis points.
Conversely, if the issuer’s credit rating is upgraded or certain positive conditions are met, the coupon rate may “step down”, decreasing by the defined margin.
This structure is designed to compensate investors for changes in the issuer’s credit risk over time
I hope this helps clarify your question.
If you have any more queries, feel free to reach out, I’ll be happy to assist you here or through any of the channels below:
Introduce yourself by adding your picture and information about yourself and your interests to your profile.
Get to know the community by browsing discussions that are already happening here. When you find a post interesting, informative, or entertaining, use the 
to show your appreciation or support!
Contribute by commenting, sharing your own perspective, asking questions, or offering feedback in the discussion. Before replying or starting new topics, please review the Community Guidelines.