Credit Spread and Risk-Spread Measures

This branch groups spread measures that translate credit and optionality risk into extra yield.

In this section

• Benchmark Spread Measures
  Focused fixed-income entries about credit, default, government, nominal, option-adjusted, and zero-volatility spreads.
  • Credit Spread
    Extra bond yield investors demand over a safer benchmark to compensate for credit risk and related fixed-income risks.
  • Default Spread
    An in-depth explanation of Default Spread, a specific type of credit spread that focuses on default risk differences, including types, examples, and significance in finance.
  • G-Spread
    Bond spread measure comparing a bond's yield with the yield of a government bond of similar maturity.
  • Nominal Spread: Analyzing Yield Differences in Bonds
    Understanding Nominal Spread: Difference between a bond's yield and a Treasury bond yield of similar maturity, not accounting for the time structure of interest rates.
  • Option-Adjusted Spread
    Fixed-income spread measure that removes embedded-option value so callable or prepayable bonds can be compared more fairly.
  • Z-Spread
    Fixed-income spread measure that adds one constant spread to each point on the benchmark spot curve to match a bond's price.
• High-Yield and Workout Spreads
  Focused fixed-income entries about high-yield spread analysis and workout-period risk.
  • High-Yield Bond Spread: The Extra Yield Investors Demand for Lower-Quality Credit
    Learn what a high-yield bond spread measures, why it widens or tightens, and how investors use it to read credit risk and market stress.
  • Workout Period: Understanding Yield Discrepancies in Fixed Income Securities
    A comprehensive guide to understanding the concept of workout periods in fixed income securities, including the causes of yield discrepancies and how they are adjusted.