High Yield Credit Spreads At Lowest Levels Since September

Spreads on high yield bonds continue to narrow, and at a level of 1,060 basis points (bps) above Treasuries, they are now at their lowest levels since late September according to Merrill Lynch's High Yield Master Index. As shown in the chart below, current levels are still 155 bps above where they were prior to the Lehman bankruptcy. So while many market indicators have worked off much of the panic that was caused by the Lehman, high yield spreads still have some work to do before reaching "pre-Lehman" levels.