Bond Rally Teeters as Yield Spreads Blow Out: Credit Markets

The record rally in corporate bonds is showing signs of cracking, with yields rising the most in 13 months relative to government debt and new sales falling to the least this year.

The extra interest investors demand to own company debentures rather than government debt widened 6 basis points this week to 149 basis points, according to Bank of America Merrill Lynch’s Global Broad Market Corporate Index. The last time spreads rose in a week was in the period ended Feb. 12. Global corporate bond issuance tumbled 56 percent to $19.6 billion, data compiled by Bloomberg show. (more)