The article discusses how to value risky bonds by adding a spread to the risk-free rate. It explains the concept of duration and two types of spreads: Z-spread and nominal spread. The spread for a bond can be estimated by comparing it to similar bonds with known credit ratings. Floating-rate notes are valued at par when discount rates match coupon rates. Vanilla interest rate swaps can be valued using a portfolio of fixed and floating-rate instruments. Complex bonds with options can be valued using specific models.