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Bond Market News
ISM Services Rises; GM, AIG, Apple Price $ Bonds
May 6, 2025
US Treasury yields continued to inch higher, with the curve up by 2-4bp. The US April ISM Services Index rose to 51.6 vs. estimates of 50.2 and the prior month’s 50.8 print. Among its sub-components, the Prices Paid Index jumped to 65.1, its highest level since 2022.
Looking at equity markets, the S&P and Nasdaq were both lower by 0.6% and 0.7% respectively, snapping a 9-session winning streak. Looking at credit markets, US IG CDS spreads were tighter by 1bp, while HY CDS spreads tightened by 2.1bp. European equity markets ended flat while CDS markets were closed. Asian equity markets have opened with a positive bias today. Asia ex-Japan CDS spreads were wider by 0.8bp.
New Bond Issues
General Motors raised $2bn via a three-trancher. It raised:
- $750mn via a 3Y bond at a yield of 5.373%, 30bp inside initial guidance of T+185bp area
- $750mn via a 5Y bond at a yield of 5.638%, 30bp inside initial guidance of T+200bp area
- $500mn via a 10Y bond at a yield of 6.287%, 25bp inside initial guidance of T+220bp area
The senior unsecured notes are rated Baa2/BBB/BBB. Proceeds will be used for general corporate purposes, including to refinance a portion of its $1.25bn 6.125% 2025s.
AIG raised $1.25bn via a two-trancher. It raised $625mn via a 5Y bond at a yield of 4.884%, 30bp inside initial guidance of T+125bp area. It also raised $625mn via a 10Y bond at a yield of 5.456%, 33bp inside initial guidance of T+145bp area. The senior unsecured notes are rated Baa2/BBB+/BBB+. Proceeds will be used for general corporate purposes.
Apple raised $4.5bn via a four-trancher.
The senior unsecured notes are rated Aaa/AA+. Proceeds will be used for general corporate purposes.
Rating Changes
- Fitch Downgrades Whirlpool’s IDR to ‘BB+’; Outlook Negative
- International Flavors & Fragrances Outlook Revised To Positive On Bond Tender Using Pharma Solution Divestiture Proceeds
- Moody’s Ratings places Sunoco’s ratings under review for downgrade following agreement to acquire Parkland
New Bonds Pipeline
- Pertamina Hulu Energi hires for $ 5Y/10Y bond
- Medco hires for $ 5NC2 bond
Term of the Day: Qualified Institutional Placement (QIP)
A qualified institutional placement (QIP) refers to an fund raising mechanism wherein listed companies can issue equity shares to qualified institutional buyers without elaborate regulatory paperwork. In essence, it is a private placement to institutional buyers with lower legal fees, funding costs and is faster than a follow-on public offer (FPO). QIPs are more commonly observed in India and in some parts of southern Asia.
Talking Heads
On Conflicting Data a Challenge to Fed Rate Decision – Citi CEO, Jane Fraser
“It is very hard for the Fed right now because of this disconnect between hard data and soft data. If it’s a 10% tariff, easier to absorb. If it is 25% or higher, then that will have more material ramifications
On Companies Having Sold Commercial Paper to Boost Cash – JPMorgan
“Companies are raising cash as a precautionary measure in response to the heightened uncertainty following Liberation Day… Absent any idiosyncratic events, there’s a reasonable case for yields to move lower and spreads to tighten in the near term, especially if issuers begin to repay the short-term funding raised earlier”
On ‘Trump Put’ Will Limit Corporate Bond Spread Widening – BofA
“The Trump administration has demonstrated that they are sensitive to the negative impacts of tariff policies on markets and, ultimately, the US economy… ‘Trump put’ supports our view that IG spreads should stay range-bound in 2025 between 90 and 130bp… Peak tariff risks are likely behind us”
Top Gainers and Losers- 6-May-25*
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