Are corporate bonds proving to be new government bonds?

The focus of financial markets and the political world has been on country risk over the past few weeks.

The troubles affecting Greece show little sign of abating, and the contagion has spread to other peripheral eurozone economies, in particular Spain and Portugal. Meanwhile, the fundamental factors affecting the corporate bond market point to a positive outlook that should see credit spreads continue to tighten. This situation is in stark contrast to where we were a year ago, when the corporate world was in meltdown and the financial sector required massive government support to prevent it going under. That support helped corporate bonds and other risk assets to stage a massive recovery f...