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Bond Market News
HSBC, Hong Kong Launch Bonds amid Surge in Primary Issuances
May 7, 2026
US Treasury yields eased across the curve by 7-8bp with oil prices easing. This comes amid reports about a potential peace deal being signed soon between US and Iran, ultimately leading to an opening of the Strait of Hormuz. US President Donald Trump said that he had “very good talks” with Iran, adding that “it’s very possible we’ll make a deal”. Iran also said that a US proposal to end the war is “still being considered”.
Looking at US equity markets, the S&P and Nasdaq rallied by 1.5% and 2% respectively. US IG CDS spreads were 1.4bp tighter and HY CDS spreads were 8.1bp tighter. European equity markets ended sharply higher. The iTraxx Main CDS spreads tightened by 2.4bp and the Crossover spreads tightened by 12.2bp. Asian equity markets have opened in the green this morning. Asia ex-Japan CDS spreads were 3bp tighter.
New Bond Issues
- HSBC $ 4NC3/8NC7 at T+110/130bp area
- Hong Kong € 8Y/$ 5Y at MS+40bp/T+30bp areas
- Golomt Bank $ 3Y at 8.5% area
Westpac Banking raised $4bn via a four-trancher.
The senior unsecured notes are rated Aa2/AA-. Proceeds will be used for general corporate purposes which may include loans to other offices/entities within WSTP and its consolidated controlled entities.
FAB raised $700mn via a 7Y sukuk at a yield of 4.859%, 30bp inside initial guidance of T+115bp area. The senior unsecured note is rated Aa3/AA- (Moody’s/Fitch), and received orders of over $1.45bn, ~2.1x issue size.
City of Buenos Aires raised $500mn via a 10Y bond at a yield of 7.375%, inside initial guidance of the high 7% area. The senior unsecured note is rated B2/B-/B-. The note has a weighted average life (WAL) of 9 years. Proceeds will be used to fund to fund future amortization payments in accordance with Law No. 6,504 as amended by Law No. 6,734.
Level 3 Financing raised $1bn via an 10.75NC5.25 bond at a yield of 7.494%, ~23bp inside initial guidance of 7.50-7.75% area. The senior unsecured note is rated B3/B-/B-. Proceeds will be used to fund the purchase of the notes under its concurrent tender offer.
HSBC raised €3.5bn via a three-trancher. It raised:
- €1bn via a 3.5NC2.5 bond at Euribor + 75bp, 25bp inside initial guidance of 3m Euribor + 100bp area
- €1.25bn via a 5NC4 bond at a yield of 3.553%, 30bp inside initial guidance of MS+105bp area
- €1.25bn via a 10NC9 bond at a yield of 4.086%, 30bp inside initial guidance of MS+140bp area
The senior unsecured notes are rated A3/A-/A+. Proceeds will be used for general corporate purposes.
BAT International raised €500mn via a 3Y bond at a yield of 3.405%, 37bp inside initial guidance of MS+100bp area. The senior unsecured note is rated Baa1/BBB+/A-. The notes are guaranteed by British American Tobacco PLC, BAT Capital Corp, BAT Netherlands Finance BV and Reynolds American Inc. Proceeds will be used for general corporate purposes including repayment of upcoming maturities.
ANZ Bank raised €750mn via a 12NC7 Tier-2 bond at a yield of 4.145%, 30bp inside initial guidance of MS+155bp area. The subordinated note is rated A3/A-/A-. Proceeds will be used to finance/refinance a combination of new or existing assets aligning with its sustainability framework.
Lloyds raised €750mn via a 7NC6 green bond at a yield of 3.734%, 27bp inside initial guidance of MS+115bp area. The senior unsecured note is rated A3/A-/A+. Proceeds will be used to finance and/or refinance eligible green assets as defined in its sustainable bond framework.
INEOS Finance raised €700mn via a 5.5NC2 bond at a yield of 7.875%, inside initial guidance of the low 8% area. The senior secured note is rated B2/B+/BB+. Proceeds will be used to repay all of its outstanding secured notes due 2027, and a portion of its secured 2028 term loans.
Mercedes-Benz raised €1.8bn via a two-trancher. It raised €1bn via a 3Y bond at a yield of 3.222%, 30bp inside initial guidance of MS+75bp area. It also raised €800mn via a 6Y bond at a yield of 3.608%, 30bp inside initial guidance of MS+105bp area. The senior unsecured notes are rated A2/A. Proceeds will be used for general corporate purposes.
Novartis raised €1.7bn via a three-trancher. It raised
- €600mn via a long 5Y at a yield of 3.195%, 35bp inside initial guidance of MS+70bp area
- €600mn via a 9Y bond at a yield of 3.532%, 35bp inside initial guidance of MS+90bp area
- €500mn via a 15Y bond at a yield of 4.015%, 32bp inside initial guidance of MS+115bp area
The senior unsecured notes are rated Aa3/AA-. Proceeds will be used for general corporate purposes.
Rating Changes
- Fitch Upgrades Telekom Srbija to ‘BB-‘/Stable; Rates New SUNs ‘BB-(EXP)’
- Acacium Group Downgraded To ‘CCC’ From ‘B-‘ On Elevated Default Risk; Outlook Negative
- Forvia SE Outlook Revised To Positive On Continued Deleveraging; ‘BB-‘ Rating Affirmed
- TK Elevator ‘B’ Rating Placed On CreditWatch Positive On Announced Acquisition By KONE
New Bonds Pipeline
- Korea Credit Guarantee Fund $ 3Y bond
Term of the Day: Convertible Bonds
As the name suggests, convertible bonds are debt instruments issued by a company where the bonds can be converted into equity shares of the company by the bondholders at a particular ratio and at particular points in time. Thus, it is a hybrid security as it has characteristics of both debt and equity. Convertibles generally carry a lower coupons and sometimes tax advantages for the issuer. China’s Midea Group raised $2.2bn in a convertible bond sale.
Talking Heads
On Big Tech Needs ‘Every Dollar’ It Can Get in AI Debt – Matt Brill, Invesco
“The simplest answer is they need every dollar they can possibly get. They’ve already tapped the US market several times. Alphabet went to Europe earlier in the year. But they need more… get a higher premium than we’ve ever gotten in tech before.. used to be really tight trading names that really did not have a lot of spread to them. They now have some yield to them.”
On Warning Against Front-Running Productivity Growth – Austan Goolsbee, Chicago Fed President
“And we need to keep an eye on the forecasts and expectations of how much of the productivity surge is still to come.. bigger the hype, the more rates would need to rise to prevent overheating”
On risking concern of more persistent inflation – Alberto Musalem, St. Louis Fed President
“Inflation is running meaningfully above our target… We have risks both on the employment side and on the inflation side. In my understanding, risks have been shifting towards … the inflation side”
Top Gainers and Losers- 07-May-26*
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