Here is a chart which shows the credit spread of high yield bonds vs. the default rate of high yield bonds since 1997.
The credit spread simply measures how much more high yield bonds yield than treasuries of similar maturities (read more on the basics of credit spreads here).
The upside over the life of the bond, if any, comes from any fall in interest rates and, in the case of corporate or emerging-market bonds, from a contraction in the credit spread that is, from the perception in the market that borrowers are more likely than they were to repay investors when the bond matures.
Credit the spread of home WiFi technology, which allows consumers to use wireless technology not only hook their television sets up to the Internet, but to link them to their handheld devices, said Paul Gray, DisplaySearch Director of TV Electronics Research.
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Yet as questions about Enron's credit-standing spread this week, it began to have difficulty making markets in some instruments.
Ronaldo overshadows his team, so Portugal coach Paulo Bento was careful to spread credit to the rest of the side for the win, trying not to heap praise on by far the brightest star on the field.
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Last year's subprime-fueled gridlock in the credit markets even spread to high-quality debt, however, as investors realized that the re-packaging and re-distribution of risky loans could signify a ticking time bomb in all corners of credit.
Direct evidence, he says, that the credit crisis has now spread way beyond Wall Street.
In a perfect credit market, the spread between these two rates, the deposit and the loan rate, would be wafer thin.
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The spread between credit card rates for people with strong credit and rates for those with average credit remained at 4.09 percent.
Until now, the Fed has been cautious in its handling of the credit crunch that has spread beyond the mortgage markets and elsewhere into the economy.
The cracks that have spread with the credit crisis could be the network through which the housing malaise travels.
Indeed, the president most certainly spread around the credit- most specifically to the extraordinary men who carried out the mission.
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Financial services firms were among the hardest-hit sectors Monday because of continued worries about the ongoing credit crisis and its global spread.
If I'm right that the risk premium is peaking for properties that are in no way marginal, the unlocking of credit markets turns back the spread clock.
One thing is clear: The global oil market cannot be waved away, and voters' tolerance for the ethanol mandate and tax credit will wane as the spread between the two fuels widens.
The subprime meltdown, which began about this time last year with the bankruptcy of New Century Financial, has spread throughout the credit markets and has dragged down banks and bond insurers along with it.
Stock markets around the globe were badly shaken by the potential spread of a credit crisis from the U.S. This was not lost on Middle Eastern markets which started selling-off Sunday, their first day of trading, and carried through Tuesday.
The subprime meltdown, which began about this time last year with the bankruptcy of New Century Financial (other-otc: NEWC - news - people ), has spread throughout the credit markets and has dragged down banks and bond insurers along with it.
That said, the Bank of American Merrill Lynch High-Grade Bond Master Index is up 3.75% through April 30 as a result of spread compression across the credit markets from the more lofty levels of the fourth quarter.
Whalen says there is a risk the contagion will spread further and create more credit quality problems for banks.
The spread on five-year credit default swaps took less time to decline to normal (around 300 basis points) after tripling in 2008.
By being showcased at Music For Change (bad weather or good weather), she is doing her part to spread awareness that to learn good credit and money habits when young is to be financially sound for life.
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Among the bottom feeders were McDonald's (not part of a typical viewer's food spread for a big game) and credit card titans Visa and MasterCard.
If a broker puts you into a sub prime loan and you're A credit, they receive what is called the yield spread premium, which also synonymous to a kick back.
Itau argues that around 60 percent of the quarterly drop was due to credit mix changes and around 25 percent because of spread reduction to compete with the government banks.
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That, in turn, forced sellers to spread the roughly 2% fees they incurred on credit card transactions among all customers, regardless of how they paid.
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By 1931 the stress in the global system was about to take down institutions at the opposite end to America: Credit Anstalt bank in Vienna sparked the 1931 banking crisis, which quickly spread to Bank of the United States (see my October 2009 film on 70 years after).
There's rate risk in this spread (short-term rates could shoot up) but no credit risk.
More critically, these risks can spread like wild fire as we saw in collateralised debt obligations and credit default swaps markets.
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