Credit Investors See Potential Risk in Bank Bonds After SVB Collapse
- CDS and bond spreads widen as investor concerns mount
- Levels reflect growing concern but not yet serious fear
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Silicon Valley Bank’s rising distress and eventual collapse fueled additional credit investor concern about the broader banking sector on Friday, further weighing on the biggest Wall Street firms’ bonds.
The extra yield that money managers get for buying bank bonds instead of Treasuries rose, signaling greater unease. Spreads on JPMorgan Chase & Co.’s 4.9% notes due 2033 widened by 0.08 percentage point, or 8 basis points, to 164 bps. For Goldman Sachs Group Inc.’s 3.1% notes due 2033, spreads widened 10 bps to 182 bps.