Corporate Finance Institute

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Credit Spread Explained

Video Overview & Insights

Credit spread is the difference between the yield (return) of two different debt instruments with the same maturity but different credit ratings. In other words, it is the difference in returns due to different credit qualities.

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Chapters:

00:00 - Intro

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Names the video "Yield Gap" explains credit spread instead.

— @Bamdira

00:20 - Yield Curve

00:45 - The Credit Spread

01:07 - Credit Spreads Change

Click here to learn more about this topic: https://corporatefinanceinstitute.com/resources/knowledge/credit/credit-spread/

To better understand how credit risk impacts the pricing of instruments like credit spreads, watch https://youtu.be/1DkQBtiPmAE next, where we explain how ratings influence market perception and risk premiums.

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