Based on Merrill Lynch data, high yield credit spreads continue to their mission to the moon, and there appears to be no signs of relief yet. As of Wednesday's close, spreads were priced at 2036 bps above the comparable treasury securities. As of the June 2007 bottom, they have increased by a whopping 746%.
With 10-year treasuries priced at 2.65% as of Thursday, companies in the high yield universe will have to pay 23% per annum to borrow money over 10 years. That's a tall order.
Charts: Bespoke Investment Group
