Intramarket Sector Spread

DEFINITION of 'Intramarket Sector Spread'

The yield spread between two fixed-income securities with the same maturity, within the same sector. The intramarket sector spread can be used to compare relative credit ratings between companies within the same sector. This is due primarily to the fact that firms issuing debt with an equal term, all else held constant, will only exhibit yield differences as a result of their credit ratings.

BREAKING DOWN 'Intramarket Sector Spread'

For example, a yield discrepancy between two transportation corporate bonds with the same maturity, would constitute an intramarket-sector spread. If at issuance the bonds trade with an equal coupon (yield) and down the road a spread develops between the two bonds, the most probable reason would be a change in credit rating for one of the firms.