High Yield Spreads at Everest Proportions

One would think that given the 10%+ gain in equity markets today, we would have seen some relief in the high yield credit market. However, that wasn't the case. Investors continue to take the "if it has a yield and isn't a US Treasury, sell it" approach. Based on data from Merrill Lynch, high yield spreads actually rose modestly from Friday's nosebleed levels. At a current spread of 1,538 basis points over comparable Treasuries, companies with less than investment grade credit will not get funding unless they are willing to pay upwards of 20% interest per year. Too bad those credit card offers aren't coming in the mail anymore. Even the yields on those were better than that!