The highest grade AAA corporate bonds yield 2.75%. BBB-rated corporate bonds, just one step above junk, 3.5%. BB-rated bonds yield just 4.28%.
Corporate Bond Spreads
The spread between Prime AAA bonds and lower-medium grade bonds (see chart below) is just 0.77 percentage points.
The spread between BBB lower-medium grade bonds and non-investment grade, speculative BB-rated bonds is just 0.69 percentage points.
The spread between BBB and BB-rated bonds hit six percentage points in the great recession.
Bond Rating Steps
Volume of Negative-Yielding Debt Rises Sharply
In the real world, yields would never be negative. In the Central Banks' bubble-blowing world, the Volume of Negative-Yielding Debt Rises Sharply.
From a low last October of just under USD 6 trillions the value of the Bloomberg Barclays Global Aggregate Negative-Yielding Debt Index has more than doubled, increasing in value by over USD 7 trillions over the last 8 months to establish an all-time record of USD 13.2 trillions earlier in late June.
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