Corporate credit has rarely looked calmer, yet underneath the surface, about $1 trillion of bonds are telling a different story. The amount of debt trading at spreads unusually wide for its credit rating has more than doubled since the start of the year. This includes about $580 billion of US bonds and almost $400 billion in Europe, specifically within non-financial high-grade securities with more than three years left to maturity.

Despite calm markets, this significant dislocation highlights underlying risks in the corporate credit sector.