A credit spread is the difference between how much interest a company pays out on its debt and how much interest a government pays out on its. For example, company XYZ might be able to borrow money at a 2% interest rate for ten years (i.e. pay 2% interest on a ten-year loan), while a government might pay 1% interest (via a government bond) for the same amount of time.

A cryptocurrency is a currency that only exists digitally and that uses encryption software to determine and track ownership (known as “blockchain” technology). Bitcoin is the best known cryptocurrency.

An individual (or a company, or a government) is said to “default” on a loan when they can’t make their repayments.

Just like personal debt, corporate debt is created when money is borrowed – but by a company. Corporate debt can take various forms, for example, a loan from a bank or a bond issued to investors.

Debt is money that an individual owes, typically from taking out a loan. For example, if I get a mortgage I will have “debt” on my house.

Deflation is when prices in an economy start falling. It’s the opposite of inflation and typically a bad sign. If an economy is healthy, people should be able to afford to pay a little bit more for things each year.

A derivative is an investment that gets its value from something else – an oil derivative derives its value from the price of oil.

A company’s profits can either be re-invested in the business (like by building a new factory) or paid out to shareholders. The amount paid out to shareholders is called a dividend.

A company’s profits can either be re-invested in the business (like by building a new factory) or paid out to shareholders. The amount paid out to shareholders is called a dividend.

An upgrade or downgrade in credit rating from a major ratings agency can be a big deal for a company, especially if they are near the line between “investment grade” and “high yield” – many investors don’t invest in companies ranked below investment grade.