
After the early-May rate backup, credit spreads across IG, HY, loans, CMBS, and CLOs have gone sideways. All-in yields driven by where risk-free Treasuries settle rather than any new change in risk appetite. IG spreads near cycle tights at 80–90 bps. HY OAS in the high-200s to low-300s. Leveraged loan spreads ~480–500 bps. A consolidation market.
Cycle Position: Current credit quality sits closer to a 2019-style benign environment transitioning toward a more cautious 2007 pre-crisis stance than to the extremes of 2010 peak stress. Delinquency and PDNA levels are well below crisis peaks but above pre-pandemic norms in CRE, C&I, and construction. Conventional bank financing is available but rationed to stronger sponsors, cleaner assets, and simpler structures. More marginal, highly levered, or transitional deals increasingly need private credit, non-bank construction lenders, and structured tax-credit capital layers to complete their stack.