Yield Spreads (menos mau)
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Yield Spreads (menos mau)
Yield Spreads
After contracting for seven straight weeks, risk premiums on investment-grade corporate bonds climbed 4 basis points in the past two days, to an average 1.93 percentage points, according to Merrill Lynch & Co. A basis point is 0.01 percentage point.
The junk bond rally has cooled as well, with yield premiums rising 14 basis points in the same period to an average 8.63 percentage points. The gap with Treasury yields was a record 11 percentage points on Oct. 10, based on Merrill figures.
Borrowers look at yield spreads in the so-called secondary market to gauge the premium they will need to offer on new bonds. A contraction in spreads last month helped spur more than $44 billion of corporate bond sales in November, almost double the previous month's total. This week, companies including GE Capital and MetLife Inc. have already borrowed more than $9 billion.
After contracting for seven straight weeks, risk premiums on investment-grade corporate bonds climbed 4 basis points in the past two days, to an average 1.93 percentage points, according to Merrill Lynch & Co. A basis point is 0.01 percentage point.
The junk bond rally has cooled as well, with yield premiums rising 14 basis points in the same period to an average 8.63 percentage points. The gap with Treasury yields was a record 11 percentage points on Oct. 10, based on Merrill figures.
Borrowers look at yield spreads in the so-called secondary market to gauge the premium they will need to offer on new bonds. A contraction in spreads last month helped spur more than $44 billion of corporate bond sales in November, almost double the previous month's total. This week, companies including GE Capital and MetLife Inc. have already borrowed more than $9 billion.
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