(1) A measure of the RISK PREMIUM a credit risky corporate or sovereign entity must pay to attract CAPITAL. The spread is generally quoted against a riskfree BENCHMARK, such as a GOVERNMENT BOND; the riskier the entity the wider the spread, and the worse the entity.

More On This Topic

Link to This Definition
Did you find this definition of CREDIT SPREAD helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary