Yield curve · Basis analysis · Credit spread decompositionThe credit spread of a corporate bond compensates for default risk, liquidity risk, and systematic risk. Our systems decompose the credit spread into its components using both market data and fundamental analysis. When a company's data signals suggest improving credit fundamentals but its bond spreads have not tightened, or when deteriorating signals precede spread widening, we flag the divergence for closer examination.
Companies issue debt at multiple points in the capital structure — senior secured, senior unsecured, subordinated, and convertible. Mispricings between these layers reflect differences in market participants' credit assessments. Our analysis provides a unified credit view across the entire capital structure, identifying inconsistencies where one tranche prices a different credit outlook than another.
Every corporate issuer produces public financial data. Our systems analyse this data to generate issuer-level credit signals: changes in covenant language, shifts in liquidity discussions, and modifications to risk profiles related to financial obligations. These signals provide lead time over credit rating changes and complement traditional spread analysis.