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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Spread To Treasuries

Definition:

Ever wonder how bonds get priced? It sure ain't random.

It happens through a spread to treasury, which is the yield difference between a a U.S. Treasury security and a similar bond. U.S. Treasury securities are considered to have pretty much zero risk, so if a U.S. Treasury is yielding 4%, a bond from a private company could yield maybe 14% because (duh) it's a much higher risk.