The basis points which are added to the yield at each point on the spot treasury rate curve marking the receipt of a cash flow. As is normally the case, the spot treasury rate virtually constitutes no volatility. The yield plus this spread will make the price of a debt instrument equal to the present value of the cash flows generated by that instrument. Those cash flows will be discounted at the appropriate spread-adjusted yield.

An investor holding a bond to maturity would capture this spread over the entire yield curve (zero curve). The static spread differs, in that sense, from the nominal spread as the nominal spread is categorically calculated on one point on the treasury yield curve. To the contrary, the static spread uses a number of spot rates on the treasury yield curve. As such, each cash flow is discounted using its maturity and a respective spot rate for that maturity. This implies that a different zero-coupon rate is applied to each cash flow.

The static spread is typically contrasted with the asset-swap spread to find out any discrepancies in the price of a fixed-income security. In general, those two spreads tend to converge in the cases of short-term debts and high credit-rating debts.

It is also known as a z-spread.