Spread Product

Spread product is the awful term for taxable (rather than municipal) bonds that are not Treasury securities. Agency securities, asset-backed securities, corporate bonds, high-yield bonds and mortgage-backed securities are different types of spread product.
The bonds are called spread product since they are assessed by the experts who buy and sell them in view of the difference between their yield and the yield of a comparable Treasury security. That difference is called a spread. For instance, in the event that a 10-year corporate bond is trading at a yield of 4% and the 10-year Treasury note is trading at a yield of 2%, the corporate bond is said to offer a 200 premise point spread.
The spread matters instead of the absolute yield on the corporate bond in light of the fact that corporate bonds imply credit risk and Treasuries don't. Consider: A corporate bond yielding 4% offers undeniably more reward for the risk when the comparable Treasury is yielding 2% than when the comparable Treasury is yielding 1%.