Penalty for Being Rated Junk Drops to Lowest Level Since 2007
- Spread between high grade and high yield now 197 basis points
- Gap narrows amid rally in high yield as risk appetite grows
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For investment-grade companies on the cusp of junk, it might not be so bad on the other side.
The additional cost for firms to borrow in the U.S. high-yield market versus high grade narrowed to 197 basis points Monday, the tightest since before the global financial crisis, according to Bloomberg Barclays index data. The spread last dipped below 200 basis points in 2007, the data show.