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Bond Market News
Vedanta, China, Mirae, DBM Launch Bonds
June 25, 2026
US Treasury yields eased further, with the curve bull flattening as the 2Y yield fell by 5bp while the 10Y fell by 8bp. Crude oil prices eased to their lowest levels since late-February amid the reopening of the Strait of Hormuz. Separately, the 5Y Treasury note auction saw modest demand just days after the 2Y note witnessed solid demand.
Looking at US equity markets, tech stocks led the Nasdaq lower again by 0.4% while the S&P ended nearly unchanged. US IG CDS spreads were flat while HY CDS spreads tightened by 0.4bp. European equity markets ended mixed. European IG CDS spreads were flat and Crossover spreads tightened by 1.5bp. Asian equity markets have opened broadly higher this morning. Asia ex-Japan CDS spreads widened by 0.1bp.
New Bond Issues
- Vedanta Resources $ Sr Sec 6Y/8Y/11Y at 7.25%/7.625%/8% areas
- China € 5Y/8Y/12Y at MS+15bp/MS+22bp/MS+33bp areas
- Mirae Asset $ 3Y/5Y at T+120bp/T+130bp areas
- Development Bank of Mongolia $ 5Y at 7.6% area
Trafigura Funding raised $500mn via a 5Y bond at a yield of 5.788%, 20bp inside initial guidance of T+180bp area. The senior unsecured note is unrated. Proceeds will be used for general corporate purposes.
Dukhan Bank raised $500mn via a PerpNC5.5 AT1 sukuk at a yield of 6.0%, 50bp inside initial guidance 6.5% area. The junior subordinated note is unrated, and received orders over $1.4bn, 2.8x issue size. If not called by 2 January 2032, the coupon will reset to the US 5Y Treasury yield plus 175.4bp.
Engie raised €1.6bn via a two-tranche green issuance. It raised €850mn via a 6Y bond at a yield of 3.427%, 35bp inside initial guidance of MS+100bp area. It also raised €750mn via a 12Y bond at a yield of 4.027%, 27bp inside initial guidance of MS+135bp area. The senior unsecured notes are rated Baa1/BBB+/A-. Proceeds will be used to finance or refinance part of the acquisition of UK Power Networks, and/or to finance other existing or future eligible green projects, in accordance with its green financing framework.
BBVA raised €1.25bn via a 5Y green bond at a yield of 3.448%, ~27.5bp inside initial guidance of MS+95/100bp area. The senior non-preferred note is rated Baa1/A-/A-. Proceeds will be used in accordance with its sustainable debt financing framework.
New Bonds Pipeline
- Bank of Baroda $ 3Y or 5Y bond
Rating Changes
- Bharti Airtel Ltd. Upgraded To ‘BBB+’ On High Growth In Africa And India, And Balance Sheet Discipline
- Moody’s Ratings upgrades Carvana’s CFR to B1, outlook remains positive
- Moody’s Ratings upgrades China Huaneng’s rating to A1; outlook stable
- China Merchants Port Upgraded To ‘A-‘ On Resilient Operations Strengthening Financial Standing; Outlook Stable
- Moody’s Ratings upgrades Carpenter Technology’s CFR to Ba1; outlook remains positive
- Moody’s Ratings changes Gabon’s outlook to negative from stable, affirms Caa2 ratings
Term of the Day: Payment-In-Kind Bonds
Payment-in-kind (PIK) is a type of bond for which, on each coupon payment date, the accrued coupon is capitalized and fully or partially paid in the form of additional bonds or added to the principal amount. PIK bonds are typically bonds with deferred coupons. These are riskier for investors due to more credit risk with respect to the PIK interest amount, payment of which can be deferred until maturity. Given this inherent higher risk, interest rates for PIK bonds are higher than for conventional bonds. Generally, issuers with liquidity stresses that are able to pay coupons in non-cash form issue these notes.
Talking Heads
On applauding reduction in Fed guidance – Scott Bessent, U.S. Treasury Secretary
“I don’t think anyone should do dot projections. The only reason I ever liked the dots was when I had my investment business, we had a trading model that actually traded against the dots, because the dots are always wrong… I do applaud Chair Warsh’s getting rid of forward guidance. I think that that is kind of a crutch that market participants have started leaning on”
On RBA Citing Phillips Curve in Bet That Its Rate Hikes Won’t Hurt Jobs
Andrew Hauser, RBA Deputy Governor
“Being on the steeper part of the Phillips curve has a potential silver lining…. while it implies that increases in excess demand have a proportionally larger impact on inflation on the way up, it also implies that timely policy steps to reduce inflationary pressures… should also have a proportionally smaller unemployment cost on the way down”
On Spotting Bargains After Brazil Bond Wipeouts
Man Group
“Latin America stands out to us as a particularly compelling pocket of value”… Brazil has benefited “from elevated oil prices in the first half of the year, which has led us to identify opportunities across a suite of energy-related names, often trading at elevated or stressed levels”
Shamaila Khan, UBS Asset Management
“We were less constructive on Brazil corporates, but that doesn’t mean we haven’t found value. We have tactically played some of these names.”
Top Gainers and Losers- 25-Jun-26*
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