Bond Spread

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Bond Spread

The difference in yield between one bond and another with a lower credit rating. In general, the bond with a lower rating has the higher yield because of the added risk involved. As such, bond spreads are used to compare risk.
References in periodicals archive ?
Fears for other countries have intensified as 10-year bond spreads have increased.
Evidence of the IRPH: The Behavior of Corporate Financial and Bank Bond Spreads
The variance of bond spreads within the Euro Area began to widen at the onset of the financial crisis in 2008, but remained within broadly containable bounds until the spring of 2010.
we show matrices that detail potential levered across a range of haircut and bond spreads .
Second, if the lack of demand in the economy leads to deflation, corporate bond spreads over gilts will narrow but only because the "real" inflation-adjusted yield on gilts will be rising.
The authors discuss the implications for the behavior of corporate bond spreads, interest rate swap spreads, and the value of aggregate liquidity and for the financing of the U.
The short and long spreads do not always agree on risk: The rates move together, but plotting one against the other shows that the connection is not lock-step: Both high and low bond spreads occur in times when commercial paper spreads are low, although high commercial paper spreads usually mean above-average bond spreads.
Why have bond spreads, although moving against Italy recently, not yet caused the "imperturbable former Communist" and others to scream as financial market flames begin to singe them?
2) As a downgrade becomes more imminent, the signal from rising bond spreads gels louder.
has experienced a larger decline in its stock price and a wider expansion in its bond spreads than the other major banking groups, S&P said, adding it ''indicates a rapid deterioration in market confidence.
The recent increases in treasuries, swap spreads and corporate bond spreads have made many borrowers reluctant to move forward on financing.
CHICAGO & NEW YORK -- Fewer and less severe economic swings in 2012, a benign default rate environment, and an influx of cash into the high yield asset class have each contributed to the tightening of high yield bond spreads, granting lower quality credits easier access to investors according to Fitch Ratings.