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Bond Market News
US Treasury Yields Inch Higher; Amazon Prices Jumbo $37bn Deal
March 11, 2026
US Treasury yields rose across the curve, with the 2Y and 5Y yields up by 2bp while the long-end rose by 4-6bp. Iran is said to have begun laying mines in the Strait of Hormuz with the US noting that it has destroyed 16 mine-laying vessels there. Meanwhile, Iran noted that oil will not leave the Middle East until the attacks cease. Following this, Brent crude rose back to over $90/bbl, but has eased slightly since then. Markets await the US CPI and Core CPI readings later today.
Looking at US equity markets, the S&P ended lower by 0.2% while the Nasdaq ended flat. US IG CDS spreads widened by 0.6bp and HY CDS spreads were 4.7bp wider. European equity indices ended higher. The iTraxx Main CDS spreads were 4.1bp tighter and the Crossover CDS spreads were 17.5bp tighter. Asian equity markets have opened higher this morning. Asia ex-Japan CDS spreads tightened by 4.3bp.
New Bond Issues
- Verizon A$ 30.5NC5.5 FRN/30.5NC5.5/30.5NC10.5 at 3mBBSW+210bp/SQASW+210bp/SQASW+230bp area
Ford Motor Credit raised $1.5bn via a 5Y bond at a yield of 5.422%, 30bp inside initial guidance of T+200bp area. The senior unsecured notes are unrated. Proceeds will be used for general corporate purposes. The new bond is priced in-line with its existing 6.05% 2031s that currently yield 5.43%.
Toyota Motor Credit raised $2.5bn via a three-trancher. It raised:
- $1.15bn via a 3Y bond at a yield of 4.063%, 28bp inside initial guidance of T+75bp area. The new bond is priced at a new issue premium of 7bp over its existing 4.65% 2029s that currently yield 3.99%.
- $450mn via a 3Y FRN at SOFR+65bp vs. initial guidance of SOFR equuivalent area.
- $900mn via a 5Y bond at a yield of 4.631%, 28bp inside initial guidance of T+100bp area. The new bond is priced at a new issue premium of 34bp over its existing 5.1% 2031s that currently yield 4.29%.
The senior unsecured notes are rated A1/A+/A+. Proceeds will be used for general corporate purposes.
Amazon raised $37bn via an eleven-tranche deal.
The senior unsecured notes are rated A1/AA/AA-, and received peak orders of over $126bn, 3.4x issue size. Net proceeds will be used for general corporate purposes which may include debt repayment, acquisitions, investments, working capital, investments in subsidiaries, capex and share repurchases. The issuance marked the largest deal in the primary markets this year overtaking Oracle’s $25bn eight-part deal and Alphabet’s $20bn seven-tranche deal in February.
McDonald’s raised €1bn via a two-trancher. It raised €500mn via a long 7Y bond at a yield of 3.534%, 38bp inside initial guidance of MS+120bp area. It also raised €500mn via a long 12Y bond at a yield of 4.073%, 38bp inside initial guidance of MS+150bp area. The senior unsecured notes are rated Baa1/BBB+, and received orders of over €4bn, 4x issue size. Proceeds will be used for general corporate purposes.
New Bonds Pipeline
- JLR $ 3Y/5Y bond
- Power Construction Corp of China $ Green bond
- Kexim $ 3Y/5Y bond
Rating Changes
- Fitch Upgrades CK Hutchison Group Telecom to ‘A’; Outlook Stable
- Fitch Upgrades Ukreximbank’s VR to ‘ccc’; Affirms IDR at ‘CCC’
- Viking Cruises Ltd. Upgraded To ‘BB+’ On Expected Deleveraging And Financial Policy Discipline, Outlook Stable
- Arthur J. Gallagher & Co. Upgraded To ‘BBB+’ On Improved Credit Profile; Outlook Stable
- Moody’s Ratings Downgrades Raizen to Caa3, negative outlook
- Moody’s Ratings downgrades Salesforce to A2 on expected debt funded share buybacks; outlook stable
- Keurig Dr Pepper Inc. Downgraded To ‘BBB-‘ From ‘BBB’ On Acquisition Of JDE Peet’s N.V.; Removed From CreditWatch
- Salesforce Inc. Outlook Revised To Negative On Potential Aggressive Buybacks And Higher Leverage; ‘A+’ Rating Affirmed
Term of the Day: Earnouts
Earnouts are a contractual provision during a merger or acquisition, providing for contingent additional payments from the buyer of a company to the seller’s shareholders. Essentially, earnouts state that the seller of a business would receive compensation in the future if the merged/acquired business achieves certain financial goals. Earnouts help bridge the differing views that both parties may have regarding the M&A agreement on an upfront cash price or valuation for example
Talking Heads
On Traders Flip to Betting Against Treasuries as War Sparks Unwind
Ian Lyngen, BMO Capital Markets
“If core-CPI unexpectedly comes in stronger, the market’s inflationary jitters will be exacerbated, pushing Treasury yields higher as rate-cut expectations are trimmed”
On Argentina pitching to Wall Street as investors reassess EMs
Javier Milei, Argentinian President
“We went from being net energy importers to net exporters in the face of what I assume is a temporary shock to what’s happening in the world. Our external accounts will benefit from the temporary change in the terms of trade”
Alejo Czerwonko, UBS Global Wealth Management
“A geopolitically tense world favors the investment case for Argentina, insofar as it forces countries to refocus on food, energy, and technological security, all areas where Argentina can help”
On ECB Not Allowing Repeat of Last Inflation Shock – Christine Lagarde, ECB President
“We are in an economic situation that’s different, we are in a better situation and we have a greater capacity to absorb shocks. We will do all that is necessary to ensure inflation is under control… We won’t rush into a decision because there is too much uncertainty, too much volatility”
Top Gainers and Losers- 11-Mar-26*
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