How can I predict the future interest rates of long-term corporate bonds?

For a project of mine, I’m supposed to predict the future interest rates for a company’s corporate bonds.

What are the important factors that I need to take into account to realistically predict these future interest rates?

If you can be detailed, please be. I’m quite lost on this. Thank you.

By | 2013-08-27T01:21:06+00:00 August 27th, 2013|Mortgages Home Loans Interest Rate|1 Comment

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  1. David August 27, 2013 at 2:05 AM - Reply

    Predicting the future is a fruitless endeavor, but generally, when the yield curve and forward rate curve are downward sloping, the market is predicting a decline in the short rate of interest.

    Since our ability to predict the future is limited, businesses must have strategies for dealing with uncertainty.

    The corporate bond investor is concerned with future interest rates and the credit spread. Like other bondholders, he or she is generally hoping that interest rates hold steady or, even better, decline. Additionally, he or she generally hopes that the credit spread either remains constant or narrows but does not widen too much. Because the width of the credit spread is a major determiner of your bond’s price, make sure you evaluate whether the spread is too narrow, but also make sure you evaluate the credit risk of companies with wide credit spreads.

    Read more: http://www.investopedia.com/articles/03/110503.asp#ixzz1de5PdRbk

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