The yield premium over risk-free benchmarks that isolates a bond’s credit and liquidity risk by stripping out the cost of embedded options. A widening OAS typically signals deteriorating credit conditions, indicating a higher probability of corporate defaults—particularly among issuers with overleveraged balance sheetsA financial "snapshot" that reveals exactly what a company owns and owes at a specific moment in time. It follows the fundamental formula: Assets = Liabilities + Equity. By subtracting what is owed (liabilities) from what is owned (assets), the balance sheet shows the "book value" or the net worth belonging to the owners. More.
