Situation Room: Same tale, wide tail

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Situation Room: Same tale, wide tail

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Situation Room

Same tale, wide tail

Credit Analysis

Same tale, wide tail 08 June 2026

Although IG spreads are around the cyclical tights, the dispersion among issuers remains Credit Strategy

wide. Currently, the ratio of 90th percentile issuer spread to the median issuer spread United States

remains relatively elevated at 1.55x, even though the median IG issuer spread is only Cross Product

2bps away from the absolute tights in January. That is high compared to the ratio of Yuri Seliger

1.51x in Jan 2025 and in Dec 2024, when median spread was near local tights. Moreover, Credit Strategist

the current level of dispersion is close to that during the Fed hiking cycle in 2022 and BofAS+1 646 855 7209

2023, when spreads were much wider (Exhibit 1). yuri.seliger@bofa.com

Sohyun Marie Lee

The drivers of this spread dispersion are diverse, including hyperscalers, autos, Credit Strategist

BofAS

chemicals, and issuers impacted by the private credit and AI concerns. The largest +1 646 855 7217

issuers trading wider than the 90th percentile include ORCL (159 bps), CHTR (188 bps), sohyun.lee@bofa.com

and F (138 bps, Exhibit 3).

Stable spreads In this report

On the other hand, the standard deviation of 20-day spread moves for IG bonds is near Daily supply snapshot

the lowest level since January at 6bps (Exhibit 2). That is also some of the lowest levels

reached in the past 5 years. The lower variability in spread changes means carry trades Daily dealer inventories update

remain attractive.

Daily HG fund flows

Exhibit 1: Ratio of issuer spread at 90th percentile to median spread remains high Daily foreign demand tracker

Although median IG spread is near January tights, the ratio of 90th percentile issuer spread to median issuer