How much extra interest a company has to pay versus a government. So, Exxon might be able to borrow money at 2% interest while a government bond for the same amount of time (e.g. 10 yrs) would pay 1% interest. That means Exxon’s “credit spread” is 1% (or 100bps). It is used to measure the creditworthiness of a borrower: they higher their “credit spread,” the riskier it is to lend them money.
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