Credit spread: Difference between revisions
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imported>Doug Williamson (Add 4th definition. Sources: linked pages.) |
imported>Doug Williamson (Remove duplication.) |
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3 | 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. | Similarly, the extra interest payable on a borrowing - over the reference 'risk-free' market interest rate - to reflect a borrower's credit risk. | ||
Revision as of 19:40, 29 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. 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.
