Credit spreads are moderately attractive

Corporate credit spreads today are at post-recession lows, which makes them much less attractive than they were four years ago. However, they are still above the levels that prevailed during the strong growth phases of the previous two business cycles. Spreads are thus only moderately attractive. Investment grades spreads offer only a modest cushion against an increase in Treasury yields, while high-yield spreads offer substantially more. Bear in mind that Treasury yields are likely to rise only to the degree that the economy and/or nominal GDP picks up, and in either case that would reduce the risk of defaults, thus providing a further cushion against higher Treasury yields. 

UPDATE: I think spreads at this level reflect a market that has lost a good deal of its pessimism, but is not necessarily optimistic or overly optimistic. High-yield spreads are still 200 bps above the lows of early 2007, when the economy was growing at a reasonable pace and the future looked OK, and the subprime mortgage crisis was still in its infancy. Investment grade spreads are only 60 bps above the 2007 lows.