01-08-2025
Barclays Says Credit Liquidity Premium Gone as E-Trading Thrives
The additional compensation investors demand to own tougher-to-sell investment-grade bonds has vanished, thanks to a boom in electronic and portfolio trading, according to Barclays Plc.
The so-called illiquidity premium on such deals dropped to nearly zero in July, from 11 basis points between 2018 and 2024 and 35 basis points between 2011 and 2017, Barclays analysts including Zornitsa Todorova and Andrea Diaz Lafuente wrote in a note this week. That excludes periods of heightened volatility, such as the Covid-19 pandemic.
