About

Blue is extra yield over Treasuries for CCC-rated and weaker corporate bonds; CCC is a weak credit grade. Gray is extra yield for the whole US high-yield market. Both series are Intercontinental Exchange (ICE) Bank of America (BofA) option-adjusted spreads (OAS).

Instructions

Read the gap between the two lines. Treat a widening gap as the weakest borrowers paying more extra yield than the rest of high yield. Treat the badge as the credit regime.

Signals

• Cash financed - Trailing-four-quarter debt over capital spending (capex) is below 0.30.
• Debt financed - A large share of AI spending has shifted to debt. Leverage risk is building, and bond markets are calm.
• Alert - Weak-credit bonds are under stress, and Treasury yields confirm it. Both held for three trading days.