US Q1 GDP Grows by 2.1%, Core PCE Rises; Vedanta, Turkiye, BNP, China Price Bonds

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June 26, 2026

Credit Ratings
Macro News

US Treasury yields eased further across the curve by 2-3bp. The annualized US Q1 GDP print came-in at 2.1%, beating expectations of 1.6%. The Headline and Core PCE readings for May came-in at 4.1% and 3.4% respectively, inline with expectations but at near 3-year highs. New York Fed President John Williams said that the Fed’s interest rates were well positioned to counter inflation and get it aligned to the 2% target. Chicago Fed President Austan Goolsbee said that the latest inflation report was not all negative, but that he would like to see an improvement particularly on the Core PCE indicator. Crude oil prices rose after initially having dropped, amid reports that a vessel was struck in the Strait of Hormuz.

Looking at US equity markets, tech stocks lead the equity indices lower again – the S&P ended nearly unchanged while the Nasdaq ended lower by 0.5%. US IG CDS spreads were wide by 0.2bp while HY CDS spreads widened by 1.1bp. European equity markets ended higher. European IG CDS spreads were 0.2bp tighter and Crossover spreads tightened by 0.5bp. Asian equity markets have opened lower this morning. Asia ex-Japan CDS spreads tightened by 1.8bp.

New Bond Issues

Vedanta Resources raised $1.75bn via a three-tranche deal. It raised:

$500mn via a 6Y bond at a yield of 7.00%, 25bp inside initial guidance of 7.25% area. The bond has a weighted average life (WAL) of 5.35Y.
$700mn via a 8Y bond at a yield of 7.375%, 25bp inside initial guidance of 7.625% area. The bond has a weighted average life (WAL) of 7.1Y.
$550mn via a 11Y bond at a yield of 7.75%, 25bp inside initial guidance of 8.00% area. The bond has a weighted average life (WAL) of 9.75Y.

The senior unsecured notes are rated Ba3/BB-/BB. The notes are guaranteed by Vedanta Resources Ltd., Twin Star Holdings Ltd., Welter Trading Ltd., and Vedanta Holdings Mauritius II Ltd. Proceeds will be used to refinance $3.6bn of bonds. Covenants on the notes include limitations on borrowings and distributions of net proceeds from asset sales. The notes also have an optional redemption of up to 10% of the outstanding amount per bond per year at 103.

The Republic of Turkiye raised $2.75bn via a 6Y sukuk at a yield of 6.75%, 37.5bp inside initial guidance of 7.125% area. The senior unsecured note is rated Ba3/BB-. Hazine Mustesarligi Varlik Kiralama AS is the issuer. The new bond is priced at a new issue premium of 42bp over Turkiye’s existing 5.95% 2031s that currently yields 6.33%.

BNP Paribas raised $1.5bn via a 4NC3 bond at a yield of 4.892%, 28bp inside initial guidance T+105bp area. The senior non-preferred note is rated Baa1/A-/A+. Proceeds will be used for general corporate purposes. Its FRN tranche was dropped at the launch phase.

China raised €5bn via a three-part deal. It raised:

€2.5bn via a 5Y bond at a yield of 2.768%, 12bp inside initial guidance of MS+15bp area
€1.5bn via an 8Y bond at a yield of 2.966%, 10bp inside initial guidance of MS+22bp area
€1bn via a 12Y bond at a yield of 3.212%, 11bp inside initial guidance of MS+33bp area

Net proceeds will be used by the Ministry of Finance for general governmental purposes.

Air France-KLM raised €500mn via a 5Y bond at a yield of 4.318%, 30bp inside initial guidance of MS+190bp area. The senior unsecured note is rated BB+/BBB-. Proceeds will be used for general corporate purposes.

Development Bank of Mongolia raised $500mn via a 5Y bond at a yield of 7.2%, 40bp inside initial guidance of 7.6% area. The senior unsecured note is rated B1/BB-. Proceeds will be used to repurchase bonds and pay related expenses, with any remaining proceeds being used to fund its business operations, including lending.

Mirae Asset Securities raised $600mn via a two-trancher. It raised $300mn via a 3Y bond at a yield of 5.164%, 20bp inside initial guidance of T+120bp area. It also raised $300mn via a 5Y bond at a yield of 5.302%, 20bp inside initial guidance of T+130bp area. The senior unsecured notes are rated Baa2/BBB. Proceeds will be used for general corporate purposes.

New Bonds Pipeline

Bank of Baroda $ 3Y or 5Y bond

Rating Changes

Adani Ports Upgraded To ‘BBB’ On Robust Financials; Outlook Stable
Carnival Corp. Upgraded To ‘BBB-‘ On Strong Forward Bookings And Expected Credit Measure Improvement; Outlook Stable
Fitch Upgrades Iliad to ‘BB+’; Outlook Stable
Moody’s Ratings upgrades Uzbekistan’s ratings to Ba2, changes outlook to stable
Moody’s Ratings upgrades Munich Reinsurance Company’s IFSR to Aa2
Moody’s Ratings upgrades Shanghai Electric’s ratings to A3; outlook stable
Moody’s Ratings downgrades Dye & Durham’s CFR to Caa1; outlook remains negative
Grupo Antolin Downgraded To ‘CCC-‘ On Proposed Debt Restructuring; Outlook Negative
Fitch Revises Arabian Centres’ Outlook to Stable; Removes UCO

Term of the Day: Weighted Average Life (WAL)

Weighted average life (WAL) is a feature of amortizing bonds, which are different from straight bonds in that they payback principal through the life of the bond rather than a one-time payment of the full principal at maturity. WAL refers to the average time, stated in years, in which the bond’s unpaid principal remains outstanding. WAL is calculated as follows with an example of a 3Y bond with a $100 face value where P1 refers to principal repayment in year one, P2 in year two and P3 in year three:
WAL = [(P1 x 1) + (P2 x 2) + (P3 x 3)] / $100

Talking Heads

On Wall Street Embracing the Dollar as Warsh’s Fed Activates Bulls

Meera Chandan, JPMorgan

“. The baton of what’s really driving markets now has been passed from energy on to the Fed’s reaction.”

Jayati Bharadwaj, TD Securities

“US data is resilient, economic activity is strong, a new chair, who is hawkish, is talking about policy, credibility, price stability. The bar to hike interest rates for the Fed is lower now, which is a shift in the perception.”

Kamakshya Trivedi, Goldman Sachs

“The reality is that the AI trade is boosting both economic growth expectations and equity-market returns in the US, making it an attractive destination for capital”

On Bond Traders Trimming Fed Rate-Hike Bets After Benign Inflation Data

Pilar Gomez-Bravo, MFS Investment Management

“These numbers are just taken with a sigh of relief that they’re not worse. The interpretation is maybe we have seen the peak of core inflation.”

Subadra Rajappa, Societe Generale

“There was definitely a concern that PCE inflation could be higher than consensus”

On seeing solid momentum in US economy – Julie Kozack, IMF spokeswoman

“Growth momentum in the U.S. economy has been solid. Because of this dynamic, we think the Fed appropriately decided to keep ⁠the policy rate on hold. Any further policy actions by the Fed will need to proceed ⁠with caution”

Top Gainers and Losers- 26-Jun-26*