Credit spread: Difference between revisions
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imported>Doug Williamson m (Add headers.) |
imported>Doug Williamson (Add 4th definition. Sources: linked pages.) |
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In other words the proportion of the total return that the issuer must pay due to credit risk. | In other words the proportion of the total return that the issuer must pay due to credit risk. | ||
4. ''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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* [[G+]] | * [[G+]] | ||
* [[Risk-free rate of return]] | * [[Risk-free rate of return]] | ||
* [[Risk-free rates]] | |||
* [[Security]] | * [[Security]] | ||
* [[Spread]] | |||
* [[Yield]] | * [[Yield]] | ||
Revision as of 21:28, 27 March 2021
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. Debt 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.
4. 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.
