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Bond Market News
Relief Rally Seen on the Back of Potential US-Iran De-escalation
March 24, 2026
US Treasury yields were marginally lower, by ~3bp across the curve. However, they eased sharply earlier on Monday following US President Donald Trump’s remarks that he would postpone strikes against Iran’s power plants. He added that they were having productive conversations. Brent Crude eased to trade at about $100/bbl. However, officials from Iran said that no such discussions had taken place. Meanwhile, markets continue to price in the possibility of Fed rate hikes this year. Separately, Chicago Fed President Austan Goolsbee said that they “could be back to the environment with multiple rate cuts for the year if inflation behaves”.
Looking at US equity markets, the S&P and Nasdaq ended higher by 1.2% and 1.4% respectively. US IG CDS spreads tightened by 3.9bp and HY CDS spreads were 15.2bp tighter. European equity indices ended broadly higher. The iTraxx Main CDS spreads were 2.9bp tighter and the Crossover CDS spreads 8.2bp were tighter. Asian equity markets opened in the green this morning. Asia ex-Japan CDS spreads widened by 1bp.
New Bond Issues
- KNOC $ 3Y/3Y FRN/5Y at T+90/SOFR eq./T+95bp area
Progressive raised $1.5bn via a two-trancher. It raised $500mn via a 5Y bond at a yield of 4.603%, 30bp inside initial guidance of T+65bp area. It also raised $1bn via a 10Y bond at a yield of 5.192%, 30bp inside initial guidance of T+115bp area. The senior unsecured notes are rated A2/A/A. Proceeds will be used for general corporate purposes.
Emera US raised $750mn via a two-trancher. It raised $450mn via a 3Y bond at a yield of 4.652%, 30bp inside initial guidance of T+110bp area. It also raised $300mn via a 7Y bond at a yield of 5.333%, 32bp inside initial guidance of T+150bp area. The senior unsecured notes are rated Baa3/BBB-/BBB. Proceeds will be used for general corporate purposes and to repay existing debt.
Rating Changes
- Bolivia Upgraded To ‘CCC+’ From ‘CCC-‘ On Reduction In Debt Service Payments; Outlook Stable
- Hecla Mining Inc. Upgraded To ‘BB-‘ On Improving Cash Flow And Debt Reduction, Outlook Stable
- Moody’s Ratings downgrades FS KKR Capital Corp’s senior unsecured rating to Ba1 from Baa3, changes outlook to stable from negative
- Moody’s Ratings Places Rumo’s Ba2 Ratings On Review for Downgrade
- Moody’s Ratings changes Piramal Finance’s outlook to positive from stable; affirms Ba3 rating
- PNC Investments LLC (Sobha) Outlook Revised To Negative On Higher Than Expected Leverage; ‘BB’ Ratings Affirmed
- Beazer Homes USA Inc. Outlook Revised To Negative From Stable On Building Leverage; Ratings Affirmed
Term of the Day: Total Return Swap (TRS)
A Total Return Swap (TRS) is a derivative contract – one party (receiver) gains exposure to a bond’s performance i.e., interest payments and price returns. In return, the receiver will pay a floating rate (e.g., SOFR+spread) to the other party (payer). This allows the receiver to gain leveraged access to the bond, while payers can hedge credit risk. Sovereigns can use TRS for immediate liquidity against their own bonds or to manage foreign currency liabilities, and sometimes provide collateralized debt.
Talking Heads
On Too Early to Alter Outlook for Four 2026 Cuts – Stephen Miran, Fed Governor
“We should wait for all the information to come in before really changing our outlook… I think it’s just still premature to have a clear view about what this is going to look like as you look 12 months out.”
On Investors Gaming Out Iran Risk as Clock Ticks on Trump’s Deadline
Michael Brown, Pepperstone Group
“Given how high the stakes are with this — essentially a binary outcome of either de-escalation, or massive escalation, participants are simply unable to ignore this”
Jon Withaar, Pictet Asset
“There is no confidence that the Iranians will acquiesce on this, especially since they made their counter threat to infrastructure assets across the region”
On Oil prices not having climbed enough to cause demand destruction – US energy secretary
“We need to be in a position where their ability to threaten the Strait of Hormuz is either gone or dramatically reduced from where it’s been the last few years, the last several decades”… US was going to release between a million and a million-and-a-half barrels per day of oil, eventually getting to 3 million bpd.”
Top Gainers and Losers- 24-Mar-26*
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