In practice, plans use a rate based on high-quality long-term corporate bond yields, currently just above 6%.
Italian and Spanish national debt sells to yield over 5 percent which is what a BB corporate bond yields here.
As it turns out, high yield corporate bond yields have nearly reached all-time lows, meaning that the prices of such bonds are nearing all-time highs.
Brent's biggest concern at present is that for the first time in five years earnings yields are below corporate bond yields, making mergers and acquisitions more expensive.
Accusations of illegal payments to Spanish politicians and uncertainty about the Italian elections prompted some investors to sell some holdings in those countries, pushing corporate bond yields to their highest levels since early October, according to an index compiled by data provider Markit.
This is a weighted average of short-term interest rates, corporate-bond yields, share prices and the trade-weighted dollar, with the weights derived from the Fed's model.
Despite two interest-rate increases this summer and a rise in corporate-bond yields, the index suggests that financial conditions in America are close to their loosest in ten years.
For one thing, given how low government-bond yields and corporate credit spreads have fallen, the time of plenty in the bond market may have passed.
The average corporate bond, as tracked by Barclays Capital, yields just 2.7%.
While heavy debtors might be expected to offer higher yields, as in the corporate-bond world, this isn't always the case with government bonds.
Lower bond yields were seen as positive for shares, as lower interest rates meant higher corporate earnings, and lower expected returns on bonds increased the relative attractions of the returns on equities.
Despite the rather dour comments from Lockhart, the tide appears to be shifting in the corporate bond market as liquidity has begun to return and both investment-grade and high-yield premiums over Treasury yields have begun to narrow in recent sessions.
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