bond spread

Definition

The difference between the yields of two bonds with differing credit ratings. Most often, a corporate bond with a certain amount of risk is compared to a standard risk-free Treasury Bond. The bond spread will show the additional yield that could be earned from a bond which has a higher risk.

Use bond spread in a sentence

You should try and figure out what the bond spread will be and put more of your money in the better one.

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When choosing between two bonds it is necessary to include both the bond spread and your ability to handle more liability.

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The ZIRP environment has Euro-zone investors starved for yield, so they are looking for the largest bond spread from the Bund as possible.

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