U.S. High-yield Spread Close To 500 Basis Points

The Bank of America Merrill Lynch U.S. High Yield Index was offering a 491 basis-point spread over Treasuries at Monday's close, placing it on track to climb above 500 basis points on Tuesday, the last trading day of the month, according to Marty Fridson, chief investment officer of wealth management firm Lehmann Livian Fridson Advisors. The index was offering just 465 basis points over Treasuries at Friday's close, but spiked higher as concerns about the Greek fiscal crisis sent Treasury yields lower and the index yield higher. "Moreover, the spread would be 502 basis points after taking into effect expected month-end rebalancing (reflecting such things as new issues, rating changes, defaults, and retirements)," Fridson wrote in emailed comments. "That would represent the widest OAS since Feb. 4, when it stood at 505 basis points." it would also be the first time since that date that the spread is wider than 500 basis points, he said.