Household is about to default on its bonds. Or at least that’s what might be inferred by looking at its spreads towards the end of October. The US consumer finance company’s benchmark 10-year bonds, launched last year at a spread of 155 basis points over US treasuries, had hit 800bp over. Default swap prices were even wider at 900bp over. Yet Household still had its single-A rating and its equity price, though way down on its high of $63.25
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