JPM High-Yield and Leveraged Loan Morning Intelligence

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JPM High-Yield and Leveraged Loan Morning Intelligence

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scheduled to be released, investors will focus on changes to the statement and information on who dissents.

Markets currently price in a one in three chance the Fed delivers a hike at 2pm. High-yield bond yields

declined 1bp while spreads widened 3bp on Tuesday to 7.52% and 320bp (3.5-month high), which

are up 28bp and 14bp in July and are up 75bp and 6bp YTD. For reference, spreads touched a post-

GFC low of 295bp on January 22nd and a YTD high of 373bp on March 30th. CCCs (+0.05% d/d)

outperformed BBs (+0.04% d/d) and Single-Bs (+0.04% d/d). And from a sector stance, Consumer Prod.

(+0.32% d/d) and Transportation (+0.21% d/d) outperformed the index whereas Telecom (-0.12% d/d) and

Technology (-0.06% d/d) underperformed. Notably, July’s 113bp of widening in the HY HPC index

(+17bp d/d to 399bp, JHYSHPC) has been accompanied by 58bp of widening in an IG AI

Hyperscaler Liquid Basket (190bp, JPAIHYRS). These conditions are also being accompanied by

decompression with CCC spreads (902bp) at a high since April 2025 and the CCC/BB spread

(702bp) hovering at its widest level since November 2023. By rating, BB bond yields are now 6.33% (-

1bp d/d), B yields are 7.61% (-1bp d/d), and CCC yields are 13.31% (-3bp d/d). And BB spreads are now

200bp (+3bp d/d, +14bp MTD), B spreads are 332bp (+3bp d/d, +7bp MTD), and CCC spreads are 902bp

(+1bp d/d, +69bp MTD). And BB and B spreads are only 10% and 14% above their post-GFC low while

CCC spreads are 62% above. For context, BB, B, and CCC bond spreads are -3bp, +9bp, and +145bp year-

to-date, respectively. HY/IG spreads of 236bp (+2bp d/d, +7bp MTD) are 6bp below the 12-month

average, whereas BBB/BB spreads of 98bp (+2bp d/d, +7bp MTD) are 7bp below the 12-month average.