UBS sees bond spreads widening slightly

NEW YORK: US corporate bond spreads may widen modestly from current levels by the end of the year, but generally demand for the bonds is strong and companies are performing well, according to strategists at UBS Group AG. Spreads on US blue-chip bonds could widen to 95 basis points from their current level of 88 basis points, strategists led by Matthew Mish wrote in a June 12 note.

Meanwhile, spreads on junk bonds may be pushed out to 325 basis points from 305 basis points.