What is a bond spread? G-spread, Z-spread and OAS
The same bond can show three different spreads depending on how you measure it. Here is each one, worked on a real bond.
Updated · Reviewed by Juan Otero
The direct answer
A bond spread is the extra yield a bond pays over a risk-free benchmark, which for dollar bonds means US Treasuries. The simplest measure is the G-spread: G-spread = bond yield − Treasury yield at the bond's average life, in basis points. A bond yielding 6.02% against a 5.14% Treasury has a G-spread of 88bps.
Worked example: América Móvil 6.375% 2035
América Móvil 6.375% 2035 (ISIN US02364WAJ45) is a plain bullet with a fixed coupon and no calls. All principal is due at maturity. Figures as of Sep 24, 2026, settlement Sep 28, 2026, from the BondTerminal engine.
| Input | Value |
|---|---|
| Clean price | 102.30 |
| Yield to maturity | 6.02% S.A. |
| Average life | 8.43 years |
| 7-year Treasury | 5.10% |
| 10-year Treasury | 5.18% |
| Treasury at 8.43 years | 5.14% |
| G-spread | 88bps |
| Z-spread | 89bps |
How these numbers were made
Figures as of Sep 24, 2026, settlement Sep 28, 2026, using a closing indicative clean price of 102.30. Bond terms are from offering documents in our catalog. Yield is semi-annual (S.A.) over ACT/365 time. The spread uses that date's official US Treasury par curve at the bond's average life. How we calculate →
Educational example, not investment advice.
How is a bond spread calculated?
- Solve the yield from the dirty price. América Móvil 2035 at 102.30 gives 6.02% S.A.
- Use the bond's average life as the Treasury tenor. For this bullet, it equals 8.43 years to maturity.
- Interpolate the Treasury curve on the same semi-annual basis. 5.10% + (8.43 − 7) ÷ (10 − 7) × (5.18% − 5.10%) = 5.14%.
- Subtract and convert to basis points. 6.02% − 5.14% = 88bps.
- Open América Móvil 6.375% 2035 in the calculator for today's price, spread and full cash-flow schedule.
G-spread vs Z-spread vs OAS
On América Móvil 2035 the G-spread (88bps) and Z-spread (89bps) agree within a basis point, because the Treasury curve is almost flat between 7 and 10 years and the bond pays its principal in one lump. They drift apart on a steep curve or on a bond that repays principal early. BondTerminal does not publish OAS; for callable bonds it measures the spread to the worst call instead (below).
| Spread | What it is | Misleads when |
|---|---|---|
| G-spread | Bond yield minus the Treasury yield interpolated at one point, the bond's average life. | The curve is steep and the bond's cash flows are spread far from that one point. |
| Z-spread | The constant spread added to every point of the Treasury zero curve that makes the discounted cash flows equal the dirty price. | The bond has embedded options: it assumes the cash flows are fixed. |
| OAS | Z-spread after removing the value of calls or puts, using an interest-rate model. | The rate model or volatility input is off; two desks can disagree by tens of basis points. |
Why average life, not maturity
For a bullet bond, average life and time to maturity are the same, so it makes no difference. For an amortizing bond, principal comes back in instalments, so average life is shorter than maturity and the matching Treasury is shorter too.
Reading the Treasury at the final maturity would compare the bond with a longer Treasury than the money is actually lent for, which misstates the spread whenever the curve slopes. BondTerminal reads the curve at average life for every bond. See amortizing bonds in our methodology.
Callable bonds: the spread follows the worst case
When a callable bond trades above its call price, its yield to worst can be the yield to that call. BondTerminal then reads the Treasury at the call tenor. Duration and average life move with it. See the worked call schedule and callable-bond methodology.
Riesgo país and sovereign spreads
Argentina's riesgo país is the EMBI Global Diversified spread for Argentina, published once a day at the close. It is an index of bond-level spreads over Treasuries, weighted by market value across its dollar bonds.
The riesgo país page adds BondTerminal's intraday estimate, which weights the Z-spreads of the six New York-law Argentine Globals by their index weights.