CCC-rated bond spreads have hit record highs relative to other credit tiers, trading at 3.4x single-B spreads versus a 30-year average of 2.1x. While most credit spreads sit at multi-decade lows, triple-C bonds have delivered negative returns this year even as broader high-yield gained.

The Morningstar LSTA CCC Loan index has lost 3.3% year-to-date, with average loan prices falling from 83 to 71.5 cents on the dollar, pushing yields above 27%. BofA strategist Neha Khoda notes CCC loans have fared worse than bonds. Dispersion is extreme: CSC Holdings (Optimum/Altice USA), the largest USD CCC issuer at $15.5bn, trades above 3,500bps, while Altice France ($6.9bn) trades at just 309bps. Altice Financing was accused of defaulting on €2bn this month.

The CCC market has shrunk from $240bn (2009) to $140bn today, just 8% of high-yield. Sketchier issuers have migrated to private credit, with Khoda noting refinanced loans moving from broadly syndicated to private credit averaged B3 ratings. This trend abated mid-2025 amid BDC scrutiny, suggesting similar idiosyncratic risks may lurk in private markets.