Keppel Prices S$ PerpNC3 at 3.3%; Markets Await NFP

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June 5, 2026

Credit Ratings
Macro News

US Treasury yields were broadly stable across the curve. Initial jobless claims for the prior week rose by 225k, worse than expectations of 215k. Market await the monthly jobs report today, with NFP expected at 88k for May and average hourly earnings expected to grow by 3.4%. The unemployment rate is expected to hold steady at 4.3%. On the geopolitical front, the Hezbollah is said to have rejected a ceasefire agreed to by Israel and Lebanon.

Looking at equity markets, the S&P ended higher by 0.4% while the Nasdaq ended 0.1% lower led by a sell-off in Broadcom’s shares. US IG CDS spreads tightened by 0.4bp and HY CDS spreads tightened 2.2bp. European equity markets ended higher. European IG CDS spreads were 0.6bp tighter and Crossover spreads tightened by 2.2bp. Asian equity markets have opened mixed this morning. Asia ex-Japan CDS spreads tightened by 0.3bp.

New Bond Issues

Keppel Ltd. raised S$325mn via a PerpNC3 bond at a yield of 3.3%, 30bp inside initial guidance of 3.6% area. The subordinated note is unrated. If not called by 11 June 2029, the coupon will reset to the 3Y SORA-OIS plus 162bp, in addition to a coupon step-up of 100bp. The note has a 6-month lookback dividend pusher and a dividend stopper as well. Proceeds will be used to refinance existing debt and/or its bonds including the 2.9% Perp.

Lloyds Banking Group raised A$750mn via a two-part green issuance. It raised A$450mn via a 6NC5 FRN at 3mBBSW+123bp. It also raised A$300mn via a 6NC5 bond at a yield of 5.831%. The note is rated A3/A-/A+ (Moody’s/S&P/Fitch).

New Bonds Pipeline

Danantara $ bond
Oncor A$ 7Y and/or 10Y senior secured $ bonds
Engie inaugural A$ 5Y and/or 10Y, PerpNC6 bonds

Rating Changes

Fitch Upgrades State Power Investment to ‘A’; Outlook Stable
Fitch Upgrades Huaneng Group and Huaneng International to ‘A’; Outlook Stable
Fitch Upgrades China Huadian to ‘A’; Outlook Stable
Moody’s Ratings upgrades Tenet’s CFR to Ba2 from Ba3, outlook changed to stable
Moody’s Ratings upgrades Netflix’s senior unsecured notes ratings to A2; outlook changes to positive
Fitch Maintains Ahli Bank on Rating Watch Negative

Term of the Day: Lookback Distribution Pusher

A lookback distribution pusher is similar to a dividend pusher where the issuer has to automatically make a distribution to thebondholder (as in coupon/principal) if they have made any distributions like dividends during a lookback period say 3, 6 or 12 months before the bond’s payment. Thesefeatures are particularly observed in perpetual bonds.

Talking Heads

On No Obvious Direction Ahead for Rates – John Williams, New York Fed President

“Monetary policy is exactly in the right place. I don’t see any need to raise or lower interest rates right now. I also don’t see an obvious kind of direction where we would go in the future… Right now I’m not that worried about dramatic, second-round effects or persistent inflation”

On AI Bubble Is Coming to Credit Markets – Robert Cohen, DoubleLine

“What’s the probability that we will be in an AI bubble? I’ll put maybe 100% on that… At the right spread I can easily be bribed to go into some of these higher quality credits”… valuations (in equities) may be getting more stretched now.

On Software Refinancing & AI Spending

Na Wei, Barclays

“They are using this time wisely to create AI strategies on both the defense and offense”

Susan Kasser, Neuberger Berman

“Expertise in software is a defining quality for them. They are using this time wisely to create AI strategies on both the defense and offense”

Christina Lee, Oaktree Capital Management

“We’re not saying its a bad industry, we’re saying we need to be selective. We’re watching it carefully and just knowing where we stand its hard to say, ‘hey, let’s be aggressive”

Top Gainers and Losers- 05-Jun-26*