Credit spread: Difference between revisions

Latest revision as of 12:05, 6 July 2022

1. Securities - issuer's credit quality.

The difference in yield between a given security and a comparable benchmark government security.

It gives an indication of the issuer’s credit quality.

2. Securities - value differential.

The difference in value of two securities with comparable maturity and yield but different credit jurisdiction.

3. Other borrowings.

Similarly, the extra interest payable on a borrowing - over the reference 'risk-free' market interest rate - to reflect a borrower's credit risk.

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-. The difference in yield between a given security and a comparable benchmark government security. It gives an indication of the issuer’s credit quality.
+. ''Securities - issuer's credit quality.''
-. The difference in value of two securities with comparable maturity and yield but different credit jurisdiction.
+The difference in yield between a given security and a comparable benchmark government security.
-. The extra yield on a debt security over the equivalent theoretical 'risk-free' security.  In other words the proportion of the total return that the issuer must pay due to credit risk.
+It gives an indication of the issuer’s credit quality.
+. ''Securities - value differential.''
+The difference in value of two securities with comparable maturity and yield but different credit jurisdiction.
+. ''Other borrowings.''
+Similarly, the extra interest payable on a borrowing - over the reference 'risk-free' market interest rate - to reflect a borrower's credit risk.
 == See also ==
+* [[Credit]]
+* [[Credit risk]]
+* [[Credit spread risk]]
 * [[G+]]
-* [[Risk free rate of return]]
+* [[Risk-free rate of return]]
+* [[Risk-free rates]]
+* [[Security]]
+* [[Spread]]
 * [[Yield]]
+[[Category:Corporate_financial_management]]
+[[Category:Financial_risk_management]]
+[[Category:Financial_products_and_markets]]