According to UBS, rising rates are creating growing disparities between bond borrowers. The 10-year yield has reached 5.24%, its highest level in decades, and credit spreads have widened, particularly for CCC-rated bonds (1,128 basis points versus 800 a year ago). Better-rated borrowers (BB) retain privileged market access thanks to solid balance sheets and durable cash flows, while the weakest segments (CCC, private credit, leveraged loan software) face concentrated but non-systemic refinancing pressures. UBS favors utilities and non-cyclical consumers in investment-grade, and remains cautious on technology and communications.
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