Interest on U.S. corporate bonds with CCC rating rises to 17.99 percent

The effective interest rate on risky U.S. corporate bonds with a credit rating of CCC or lower rose to 17.99 percent on October 22, compared to 14.93 percent on September 1. The risk premium increased during the same period from 10.49 to 13.4 percentage points. These figures come from the ICE BofA index and reflect the yields of publicly issued dollar-denominated bonds from companies with a high risk of default. The 17.99 percent is a market yield and not a guaranteed return for investors. The rising risk premium indicates increasing distrust among investors, who now demand an additional 13.4 percentage points of interest on top of the yield on U.S. Treasury bonds. This suggests that investors are becoming more cautious and are only willing to finance risky companies at higher fees. However, the current situation in the credit market does not provide direct indications for the future of bitcoin or other risky investments, as the data pertains solely to this specific group of corporate bonds.

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