Credit spreads highest in two years

Corporate spreads widen to highest level since 2005 as market corrects from overbought and overvalued position

Spreads in corporate credit widened to their highest levels in two years on 30 July, with the Itraxx Crossover index peaking at a level of 505, or a daily average of 471.25. It was the end of three days that saw the sharpest widening in many years, according to Graham Neilson, portfolio manager at Credaris. Gavan Nolan, research analyst at Markit Group, the calculation agent for the index, added: "The last time we saw volatility like this was September 2001 and its aftermath, before the inception of the indices." The corporate market has been the latest casualty in credit's declining for...