Browse Investing

Credit Spread and Risk-Spread Measures

Credit spread, default spread, G-spread, high-yield spread, nominal spread, OAS, Z-spread, and workout-period terms.

Credit spread and risk-spread measures compare a bond’s yield with a benchmark to estimate compensation for credit risk, liquidity risk, optionality, and other bond-specific risks.

Use this branch when a bond looks cheap or expensive because its spread is wide, narrow, option-adjusted, benchmark-linked, or tied to a distressed workout assumption.

What This Branch Covers

AreaUse it for
Benchmark Spread MeasuresCredit spreads, default spreads, G-spreads, nominal spreads, option-adjusted spreads, and Z-spreads.
High-Yield and Workout SpreadsHigh-yield spreads, workout-period assumptions, distressed credit, and recovery-sensitive spread analysis.

How to Use a Spread

Identify the benchmark curve, maturity point, price source, rating, seniority, collateral, call features, liquidity, tax treatment, and quote date. A spread can widen because credit worsens, liquidity deteriorates, rates move differently across the curve, or option value changes.

Common Mistakes

  • Treating spread as pure default-risk compensation.
  • Comparing OAS, Z-spread, nominal spread, and G-spread as if they were the same measure.
  • Ignoring stale prices and low trading volume.
  • Assuming a wide spread is automatically a bargain.

In this section

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Benchmark Spread Measures

Benchmark spread terms for credit spreads, default spreads, government spreads, OAS, nominal spreads, and Z-spreads.

Revised on Sunday, June 21, 2026