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Credit Market

12 Jan 2021

Corporate Bonds trading in 8% to 9% range, credit spreads indicate a Gsec yield curve shift upwards

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Corporate bonds trading at over 8% offer spreads anywhere between 200bps to 500bps depending on maturity and yield. At these spreads, the bonds indicate higher credit risk but do not indicate a deterioration in credit hereon, which may be wrong. However, they do indicate a gsec yield curve shift up as, current levels of yields below 5% at the short end look unsustainable given inflation, deficits and asset price bubbles.

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Arjun Parthasarathy
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