globalen
Credit investing glossary

Credit spread

The credit spread is the difference in yield between bonds of a similar maturity but with different credit quality. Spread is measured in basis points.

Typically, it is calculated as the difference between the yield on a corporate bond and the benchmark rate. The yield on a government bond generally is considered to be a benchmark rate. The credit spread thus gives an indication of the additional risk that lenders take when they buy corporate debt versus government debt of the same maturity.

Consistently at the forefront of credit management
Consistently at the forefront of credit management
Credit investing
Changes in the spread indicate that perceptions of the risk of a specific issuer has changed or that perceptions of general market conditions have changed. For example, if the market becomes more skeptical about the creditworthiness of an issuing company, the spread of that company’s bonds widens (its yield relative to the benchmark widens). Or, if markets become more negative and risk-averse, spreads in general tend to widen. Similarly, if sentiment towards an issuer or a market improves, the relevant spreads would decrease.
Our introductory guide to investing in SDG credits
Our introductory guide to investing in SDG credits
The UN’s Sustainable Development Goals (SDGs) have captured the imagination as a great way of impact investing.
03-06-2020 | Insight
Reducing the carbon intensity of multi-factor credits strategies
Reducing the carbon intensity of multi-factor credits strategies
Quantitative investment strategies lend themselves well to integrating secondary objectives, such as reducing carbon intensity.
27-05-2020 | Insight
Central bank watcher: Rates in lockdown for longer
Central bank watcher: Rates in lockdown for longer
Central banks have stepped up to the plate by delivering significant amounts of easing.
28-04-2020 | Insight
Logo

Disclaimer

Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.

Please confirm that you are a professional investor and/or institutional investor and that you have read, understood and accept the terms of use for this website.

I Disagree