The yield difference between a corporate or sovereign bond and a comparable Treasury.
Spreads compensate investors for credit risk above the "risk-free" Treasury rate. Widening spreads indicate growing concern; tightening spreads indicate optimism. Investment grade spreads typically 100-200bps; high yield 300-700bps; distressed 1000bps+.
The yield difference between a corporate or sovereign bond and a comparable Treasury. Spreads compensate investors for credit risk above the "risk-free" Treasury rate. Widening spreads indicate growing concern; tightening spreads indicate optimism. Investment grade spreads typically 100-200bps; high yield 300-700bps; distressed 1000bps+.
In bonds, Credit Spread is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
Spreads compensate investors for credit risk above the "risk-free" Treasury rate. Widening spreads indicate growing concern; tightening spreads indicate optimism.
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