Corporate Credit Spreads Snap Tighter
Strong demand easily soaked up the deluge of new issue supply.
Credit spreads in the corporate bond market snapped tighter last week as strong demand easily soaked up the deluge of new issue supply over the past two weeks. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade market) tightened 5 basis points to end the week at +113. In the high-yield market, the BofA Merrill Lynch High Yield Master Index tightened 19 basis points to end the week at +329. Across other asset markets, equities continued their upward march as the S&P 500 rose 1.16% and commodities generally strengthened, with oil rising $1.25 per barrel to $69.