Credit Insights

Bond Market Activity Returns to Normal

Dave Sekera, CFA

Although credit spreads in the corporate bond markets widened slightly at the end of last week, activity across the fixed-income markets was generally back to normal after a wild ride in early February. Changes in interest rates and credit spreads were muted, and the decrease in volatility led to a reopening of the window to the new issue marketplace. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade bond market) widened 2 basis points to end the week at +100. In the high-yield market, the average spread of the BofA Merrill Lynch High Yield Master Index also widened slightly, by 8 basis points to +358.