High Yield Spreads: Up, Up, and Away

As we have been doing periodically for several months now, below we have updated the latest spreads between high yield corporate bonds and comparable treasuries.  As of 1/23, spreads hit a high for this period of 748 basis points (although they have recently contracted by 63 bps down to 685 bps).  This translates into a 210% gain from the lows reached in June of 2007 and marks the largest spike in the series' history.  Additionally, the only time spreads were this high over the last ten years was during the bear market from 2000 - 2003.

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