africaen
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.
Central bank watcher: The great repression
Central bank watcher: The great repression
Monetary authorities are likely to continue repressing sovereign borrowing costs well below the nominal rate of economic growth, for years to come.
19-10-2020 | Insight
Credit outlook: Markets already have the vaccine
Credit outlook: Markets already have the vaccine
The world is waiting for a vaccine that will enable us to return to our normal lives.
29-09-2020 | Insight
Broadening credit opportunities through emerging market corporate debt
Broadening credit opportunities through emerging market corporate debt
It is a misperception that emerging market companies are small, risky and single-focused.
03-07-2020 | Interview
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