middle easten
Credit investing glossary

Definition of basis points

Basis points are a unit of measure that is used, amongst others, to reflect percentage changes in financial instruments. Typically, it is used to represent changes in interest rates, yields and spreads.

Converting percentage changes to basis points

One basis point is defined as one-hundredth of a percentage point, which is 0.01%, and which equals 0.0001.

For example, if a bond yield declines from 7% to 6.75%, the yield has declined by 25 basis points.

If a commercial bank increases its mortgage rate from 4.5% to 5.5%, the rate has risen by 100 basis points.

Consistently at the forefront of credit management
Consistently at the forefront of credit management
Credit investing
Fixed income outlook: Inflation hyperventilation
Fixed income outlook: Inflation hyperventilation
Heading into H2, we still find plenty to disagree with in the prevailing market consensus.
15-06-2021 | Insight
Showing the way to Paris-aligned investing
Showing the way to Paris-aligned investing
The race to zero is on.
10-06-2021 | Insight
Finding the downside risks in credit with ESG
Finding the downside risks in credit with ESG
Using financially material ESG information leads to better-informed investment decisions and benefits society.
09-06-2021 | Insight