CCC-Rated US Bond Spreads Climb Above 1,000 Basis Points
The gap over U.S. Treasurys has widened from 860 basis points in early September, reaching its highest level since the 2023 regional banking crisis.
CCC-rated U.S. corporate bond spreads have widened beyond 1,000 basis points over Treasurys, marking the first move above that level since the 2023 regional banking crisis and signaling renewed stress in the riskiest part of the credit market.
The spread stood at 860 basis points in early September before moving higher. A basis point equals one-hundredth of a percentage point, so the shift means investors now demand more than 10 percentage points of additional yield over comparable U.S. government debt to hold the lowest-rated corporate bonds.
Collin Martin, head of fixed income research and strategy at Schwab, said the main driver is an economy that is performing well but not exceptionally strongly. He also said CCC-rated issuers are the most sensitive to changes in interest rates.
The widening in high-risk credit adds to a more defensive backdrop for risk assets, including crypto markets. It also places attention on whether stress remains concentrated among the weakest borrowers or spreads further across corporate debt.
