Ten basis points equals 1/10 of one percent per year or $10,000 over ten years on one million face amount of bonds. Ratings based credit spreads on municipal bonds range from 5 basis points to 100 and more depending on how the market feels about credit risk generally and the rating opinion carried by the particular bond issue.
An Investment in Performance
Credit spreads do not decline in concert with declining interest rates. Consequently, credit spreads account for a greater portion of total return in a low rate environment than in a high interest rate environment