A Classic Investment Gets a Modern Makeover.

The article provides information related to corporate bonds. As financial instruments that steadily throw off cash, corporate bonds are a no-brainer. But until a few years ago, they were a tricky proposition for the average investor. Buying corporate bonds on the open market is even more complicated. Prices shift from minute to minute, and brokers often take a hefty, disguised markup by cutting into the investor's interest rates. But that has changed, thanks to a simplified and more affordable type of bond called the retail note. Offered primarily by Merrill Lynch, ABN Amro's LaSalle investment banking division, and Chicago boutique firm Incapital, retail notes are priced at $1,000 apiece, with some "baby bonds" available for $25. The bonds are now issued by 25 blue-chip companies ranging from Bank of America to Ford to GE, and the value of the notes they've issued has doubled to $150 billion in the past three years. As with any bond, of course, there's always the chance that an issuer will default, but with retail notes it's easier to buy several to spread out one's risk.