Credit stress is quietly building in the riskiest corner of the US corporate bond market.
CCC-rated and lower bonds now yield 12.0% spreads—the widest since November 2022. That's a 298 basis point jump in just 5 months, blowing past April's 11.4% peak.
For context:
• 2022 bear market peak: 12.9%
• 2020 pandemic peak: 19.6%
If this pace holds, we'll hit 2022 levels this month.
What does this mean? Companies with weak balance sheets are facing much higher borrowing costs. Refinancing risk is real. Default risk is rising. And when junk debt wobbles, it's often an early warning sign for broader equity markets.
This isn't front-page news yet, but it's worth watching. High-yield spreads tend to lead, not follow.
CCC-rated and lower bonds now yield 12.0% spreads—the widest since November 2022. That's a 298 basis point jump in just 5 months, blowing past April's 11.4% peak.
For context:
• 2022 bear market peak: 12.9%
• 2020 pandemic peak: 19.6%
If this pace holds, we'll hit 2022 levels this month.
What does this mean? Companies with weak balance sheets are facing much higher borrowing costs. Refinancing risk is real. Default risk is rising. And when junk debt wobbles, it's often an early warning sign for broader equity markets.
This isn't front-page news yet, but it's worth watching. High-yield spreads tend to lead, not follow.
