Tighter Conditions Widen Spreads

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    Credit portfolio managers see credit conditions tightening in North America, with credit spreads widening and corporate defaults rising, says a survey from the International Association of Credit Portfolio Managers (IACPM). Its ‘Credit Spread Outlook’ index for North American investment-grade debt, which measures the expected direction credit spreads will move over the next three months, widened to -23.4 in the new reading from -2.2 at the end of the second quarter. A negative number indicates credit conditions are expected to worsen or widen, while positive numbers mean that credit conditions are expected to improve or narrow. Meanwhile, the credit outlook for Europe has stabilized. The index for European investment-grade debt changed to 11.1 from -7.7 at the end of June.