Concept guide · Rates & Credit
Credit Spreads & Corporate Stress
How financing risk is reflected in the difference between corporate and sovereign yields.
What a credit spread is
A credit spread measures the yield difference between credit instruments and an appropriate lower-risk reference of similar maturity, reflecting credit and other risks.
What wider spreads suggest
Higher spreads may indicate greater perceived default or liquidity risk, but changes can also come from duration, issuance or market technical factors.
Read it properly
Compare similar maturities, ratings and bond structures; spreads are not a universal default probability.