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Bond Market News
Treasury Yields Jump Higher by 10bp, Brent Hits $100/bbl Again
March 12, 2026
US Treasury yields jumped higher across the curve by ~10bp. Brent crude jumped above $100/bbl on the back of attacks occuring in the Strait of Hormuz. The rally in oil prices comes despite the IEA agreeing to discharge 400mn barrels from emergency oil reserves. On the data front, US CPI YoY for February rose by 2.4% and Core CPI rose 2.5%, both coming in line with expectations. Analysts however expect a significant rise in the headline inflation reading for March due to the impact on energy prices arising from the war in the Middle East. Separately, the 10Y Treasury note auction saw solid demand with a bid-to-cover of 2.45x and a high take-up from indirect bidders.
Looking at US equity markets, the S&P ended lower by 0.1% while the Nasdaq ended higher by 0.1%. US IG CDS spreads widened by 1.5bp and HY CDS spreads were 8bp wider. European equity indices ended lower. The iTraxx Main CDS spreads were 1.7bp wider and the Crossover CDS spreads were 13.2bp wider. Asian equity markets have opened in the red this morning. Asia ex-Japan CDS spreads widened by 3.5bp.
New Bond Issues
UBS raised $3bn via a three-trancher. It raised:
- $1.25bn via a 3NC2 bond at a yield of 4.302%, 28bp inside initial guidance of T+95bp area.
- $500mn via a 3NC2 FRN at SOFR+81bp vs. initial guidance of SOFR equivalent area.
- $1.25bn via a 6NC5 at a yield of 4.632%, 30bp inside initial guidance of T+115bp area.
The senior unsecured notes are rated Aa2/A+/A+. Proceeds will be used for general corporate purposes.
Morgan Stanley raised $6bn via a two-trancher. It raised $3.5bn via a 6NC5 bond at a yield of 4.708%, 17bp inside initial guidance of T+110bp area. It also raised $2.5bn via a 21NC20 bond at a yield of 5.90%, 17bp inside initial guidance of T+125bp area. The senior unsecured notes are rated A1/A-/A+. Proceeds will be used for general corporate purposes.
Nestle raised $2bn via a three-trancher. It raised:
- $750mn via a 5Y bond at a yield of 4.228%, 25bp inside initial guidance of T+70bp area.
- $500mn via a 7Y bond at a yield of 4.530%, 25bp inside initial guidance of T+80bp area.
- $750mn via a 10Y bond at a yield of 4.834%, 27bp inside initial guidance of T+90bp area.
The senior unsecured notes are rated Aa3/AA-. Proceeds will be used for general corporate purposes.
New Bonds Pipeline
- JLR $ 3Y/5Y bond
- Kexim $ 3Y/5Y bond
Rating Changes
- Fitch Upgrades CK Infrastructure to ‘A’ with Outlook Stable; Off Rating Watch Positive
- Fitch Upgrades EQT’s LT IDR to ‘BBB’; Outlook Stable
- BorgWarner Inc. Upgraded To ‘BBB+’ From ‘BBB’ On Strong Credit Metrics; Outlook Stable
- Raizen S.A. Downgraded To ‘SD’ From ‘CCC-‘ On Request For Out-Of-Court Debt Restructuring
- Fitch Downgrades Harley-Davidson’s IDR to ‘BBB’; Outlook Negative
- Moody’s Ratings downgrades Orbia’s ratings to Ba2; outlook remains negative
- Gran Tierra Energy Inc.’s Notes Due 2029 Downgraded To ‘B-‘; Rating On Notes Due 2031 Affirmed At ‘B’
- Fitch Upgrades Marvell Technology to ‘BBB+’; Outlook Stable
Term of the Day: Baseline Credit Assessment (BCA)
Baseline Credit Assessment (BCA) is a component in a broader methodology used by rating agency Moody’s to assess banks. This is used to analyze a bank’s intrinsic or standalone strength, without external support. BCA has three components:
- Macro Profile: Assessing the banks operating environment with regard to economic strength, institutional strength, susceptibility to event risks
- Financial Profile: Analyzing predictive measures of solvency and liquidity, risk factors and risk mitigants
- Qualitative Factors: Adjusting the financial profile by incorporating factors like diversification, opacity and complexity, corporate behaviour
Talking Heads
On Argentina Missing Early Window to Sell Bonds
Luis Caputo, Economy Minister
“Country risk will go to the level that we think it should be. Whether that takes six months, a year or a year and a half, we do not know”
Katie Exum, at Gramercy Funds Management
“Argentina yields are fair. The key issue is organic FX reserve accumulation under the current framework, especially given the country’s maturity profile with both private markets and the IMF”
Kevin Murphy, Wellington Management
“Argentine spreads should be narrowing, and what Argentina could probably do to hustle that along is take some steps to get the credit upgraded”
On Credit Markets Showing Resilience – David Rosenberg, Oaktree Capital
European loans offer “almost 100 basis points extra yield” compared to similar US risks… If you look at the quality of investment grade, the high yield market, it’s the best quality we’ve seen in over 10 years
On Risk That Oil Shock Will Delay Next Fed Cut – Morgan Stanley
“If the Fed listens to its history and looks through oil-induced price pressures to deliver earlier-than-expected easing, then we think we are in good position”
Top Gainers and Losers- 12-Mar-26*
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