When interest rates are very low, or when the yield curve is flat or inverted, these spreads on corporates can thin. This is mostly true with the higher credit quality of corporate bonds rated A or better.
If a 10 year treasury is at 2.5%, a corporate bond may be at 2.85% of a high quality. Lower grade bonds or junk bonds will have higher spreads as their credit quality is less.
Attractive spreads over treasuries is what professional or seasoned traders look for. As interest rate environments change, these levels will adjust. This market is changing every minute.
Recommended Reading:
Corporate Bonds: Structure and Analysis
Managing a Corporate Bond Portfolio
4 comments:
I am thinking about buying some Long Dated LIFFE Treasury Gilts - Do you know where i can get the prices from and how long they are for and what coupon they pay?
Hi. I believe GILTS are not traded much by US firms. They are mostly european I think.
I don't think they are issues much anymore. Maybe someone else can help with a more thorough answer.
I don't normally like buying securities that have limited sellability (if that is a word) based on decreased new issue volume and sellers in the market.
Hi, I'm a reporter with a newspaper and am looking to speak with individual investors who have bought corporate bonds recently. Are you one of them? If so, would you be willing to talk to me for this story? Please email me at: supershef@gmail.com.
I am not an investor in corporate bonds. I am a teacher and author. Perhaps there are other investors who will see your post and reply. Let us know when your deadline may be, as it is the week of labor day and much of the investment world and Internet world is on vacation.
We'll see. Good luck with your story.
Post a Comment