Credit Spreads

May 29th, 2014 12:01 pm | by John Jansen |

Corporate Bond Spreads remain  very firm and unchanged over the last several days. That is a bit of a victory as the Treasury market rally should have widened spreads a tad. 3M is offering 5s and 30s today at very tight spreads. The company is pristine and my main corporate bond source says that the AA credit has traded as if it were a AAA company for the last twenty years. Notwithstanding that seasoned veterans enthusiastic endorsement the 5 year at +25 is nearly on top of agency paper which trades in the mid teens. It is crazy but there is no end in sight to the lunacy.

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  1. One Response to “Credit Spreads”

  2. By Mike C on May 29, 2014 | Reply

    Divergence between equities and bond yields is pretty incredible right now.

    Usually one would expect one side to ‘pull’ the other towards it but equities are being given so much lift from low bond yields – scary potentialities out there. Equities saying 4% – 5% growth coming. Bonds saying it will fade quickly. Which is correct?

    Potentialities. Great word.

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