Corporate cost of capital/The behavioral consumer shifts being seen

As we market participants wake up each morning now to see where the 10 yr treasury yield is at, corporate America is dealing with its own continued rise in the cost of borrowing coincident with that treasury rate rise. While down a few bps over the past few days, the Bloomberg high yield to worst yield closed yesterday at 9.21%, just off the highest level since November 2022. If you're a CCC rated company, you're paying more than 14%. 

Some of us can make ourselves feel better by saying spreads are still relatively tight and contained but companies are paying the absolute rate on borrowing. 

High Yield to Worst yield

CCC Yield to Worst

Listening to what Conagra had to say in its earnings call yesterday was sobering, a stock we own. And, they made clear on where they are prioritizing its cash flow use: