Similarities between Long-Term Investment-Grade and High-Yield Issuance
Both issuers and investors considering (non-callable) long-term debt of different maturities weigh the relative risk associated with a maturity choice against its costs or yield-to-maturity. Under normal market conditions, longer maturities are associated with both higher interest rates (yields-to-maturity on government bonds) and higher credit spreads for a given issuer.
Differences between IG and HY Issuance
The differences between investment-grade and high-yield corporate bonds go well beyond simply a difference in credit spreads to compensate investors for assuming more or less default risk.
