Daily Archives: December 24, 2014

Video : How Credit Spread Changes and What is NPA and Restructured Assets

Credit Spreads and How it changes?
Credit spreads are the difference in yield between two bonds of similar maturity but different credit quality. For example, if the 10-year Government Bond is trading at a yield of 8.5% and a 10-year corporate bond is trading at a yield of 10.5%, the corporate bond is said to offer a 200-basis-point spread over the Government Bond.
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NPA and Restructured Assets
The asset quality of banks is an important indicator of their financial health; it also reflects the efficacy of their credit risk management and recovery environment. Asset quality is measured as NPAs (Non-Performing Assets).
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