Horray! The issuance of $2.5 billion of non-guaranteed notes sold by JP Morgan Chase yesterday is a signal that the worst is behind…oh, wha? Wait. Really. Damn.
The bonds are already trading lower, which is being viewed by many that the recent rally in corporate bond s is beginning to reverse.
Yield spreads on the five-year notes widened by about 18 basis points to 293 basis points more than Treasuries, Reuters is reporting. The weakening could spell bad news for other banks and financial firms that want to sell new debt, a precondition to their ability to repay TARP funds.