Skip to main content

The following is an excerpt from today’s report from LFI partner publication CreditSights, titled “Makes Me Wonder: Prior HY Cycle Tights vs. Now,” with a graphical representation. The report is available in full to subscribers online, but a snippet follows:

  • As a follow-up to our examination of historic IG tights compared to current valuations, we take a look at prior all-time tights for HY spreads, assessing just how tight they can go.
  • HY spreads are closing in on historical tight levels with BBs and Bs trading below 2021 levels, making a new post-GFC tight likely, but almost fully contingent on further recovery in CCCs/distressed.

“So far in 2024, the HY market is extending its hot streak with spreads tightening to 323bps, the lowest level since early 2022 and materially below the July 2022 wide of 599bps. While many have expressed concern about leveraged finance maturities, a burst of activity in the primary HY bond and leveraged loan markets (and capital still on the sidelines in private credit funds) has helped to alleviate some of these worries. The positive sentiment has resulted in strong demand for new issue, even for more storied issuers, like First Quantum, and a wave of BSL for private credit takeouts as issuers capitalize on more attractive pricing,” according to Winnie Cisar, global head of strategy at CreditSights in today’s report to clients.

“In retrospect, the week of June 5, 2007’s Billboard Hot 100 hit “Umbrella” by Rihanna featuring Jay Z proved prescient as the duo opined on the potential for clouds ahead, the need to take cover and rain ‘coming down like the Dow Jones.’. At the same time, the HY market was oblivious to the brewing storm of the Great Financial Crisis, and notched an all-time tight of 241bps, 82bps tighter than current levels,” according to Cisar’s report.


Matt Fuller
LevFin Insights


This Report is for informational purposes only. Neither the information contained in this Report, nor any opinion expressed therein is intended as an offer or solicitation with respect to the purchase or sale of any security or as personalized investment advice. CreditSights and its affiliates do not recommend the purchase or sale of financial products or securities, and do not give investment advice or provide any legal, auditing, accounting, appraisal, valuation or actuarial services. Neither CreditSights nor the persons involved in preparing this Report or their respective households has a financial interest in the securities discussed herein. Recommendations made in a report may not be suitable for all investors and do not take into account any particular user’s investment risk tolerance, return objectives, asset allocation, investment horizon, or any other factors or constraints. Information included in any article that includes analysis of documents, agreements, controversies, or proceedings is for informational purposes only and does not constitute legal advice. No attorney client relationship is created between any reader and CreditSights as a result of the publication of any research report, or any response provided by CreditSights (including, but not limited to, the ask an analyst feature or any other analyst interaction) or as the result of the payment to CreditSights of subscription fees. The material included in an article may not reflect the most current legal developments. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of any research report or communication to the fullest extent permitted by law. Reproduction of this report, even for internal distribution, is strictly prohibited. Receipt and review of this research report constitutes your agreement not to redistribute, retransmit, or disclose to others the contents, opinions, conclusion or information contained in this report (including any investment recommendations or estimates) without first obtaining express permission from CreditSights. The information in this Report has been obtained from sources believed to be reliable; however, neither its accuracy, nor completeness, nor the opinions based thereon are guaranteed. The products are being provided to the user on an “as is” basis, exclusive of any express or implied warranty or representation of any kind, including as to the accuracy, timeliness, completeness, or merchantability or fitness for any particular purpose of the report or of any such information or data, or that the report will meet any user’s requirements. CreditSights may issue or may have issued other reports that are inconsistent with or may reach different conclusions than those represented in this Report, and all opinions are reflective of judgments made on the original date of publication. CreditSights is under no obligation to ensure that other reports are brought to the attention of any recipient of the Products. Certain data appearing herein is owned by, and used under license from, certain third parties. Please see Legal Notices for important information and limitations regarding such data. For terms of use, see Terms & Conditions.
If you have any questions regarding the contents of this report contact CreditSights at
© 2023. CreditSights, Inc. All rights reserved.