Single-B credits lack value

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Barclays Capital’s latest study on the level of credit spread required to compensate for the probability of a default shows that while single-A and triple-B bonds offer value – insofar as they compensate investors for the historical probability of default and average recovery value – bonds rated single-B and below do not.

For the study BarCap uses Moody’s statistics on the probability of an investment-grade corporate bond defaulting and the average recovery value after default dating back to

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