Z-Spreads
Interactive

Z-Spreads

Intuition Publishing
Updated Sep 24, 2020

Investors naturally expect higher returns from certain borrowers when comparing bonds of different types. A Z-spread is a risk levy that issuers must pay over and above the rate applicable to sovereign debt. We look at how these Z-spreads are calculated and the advantages of using Z-spreads. However, they do have their limitations, and we look at those also.