BSJT - CCC? Not For Me

2024-07-29 11:40:00 ET

Summary

• On July 24th and after all the political turmoil, the CCC option adjusted spread to US Treasurys was about 800 basis points and that is higher than at the end of March.
• What we are seeing is a widening in the credit spread of the weakest existing corporate credits.
• The way to evaluate the appropriateness of a credit spread is to first observe the enterprise value for the specific company.

This quote was a lead item in Michael Gayed’s Lead-Lag report on July 24th:

The worst of the worst credit tier, CCC-rated and below, has seen its yield spread rise by 116 basis points since its mid-March low. And this rise hasn’t been choppy either. It’s been a slow and steady climb that tends to more often signal a genuine change of sentiment than just a reactive move.(“This Could Be The Crack In The Dam,” This Could Be The Crack In The Dam

For further details see: