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May 12, 2026

Credit Ratings
Macro News

US Treasury yields continued to move higher, by 3-4bp across the curve. On the geopolitical front, US President Donald Trump said that the ceasefire with Iran is “on life support”, with Brent crude inching higher. Separately, the US Treasury’s 3Y note auction saw weak demand, with a bid-to-cover ratio of 2.54x (much softer than the prior auction’s 2.68x).

Looking at US equity markets, the S&P and Nasdaq ended higher by 0.1-0.2%. US IG CDS spreads were 0.6bp wider and HY CDS spreads were 4.7bp wider. European equity markets ended mixed. The iTraxx Main CDS spreads were 0.1bp wider while the Crossover spreads tightened by 1.4bp. Asian equity markets have opened broadly weaker this morning. Asia ex-Japan CDS spreads were 0.3bp wider.

New Bond Issues

Westpac S$ 12NC7 at 3.3% area
Shandong Hi-Speed Group $ 3Y at 4.8% area
Greentown China $300mn capped 3NC2 at 8.05% area

New Bond Issues 12 May 26

HSBC raised $1.5bn via a PerpNC7 AT1 bond at a yield of 6.75%, 50bp inside initial guidance of 7.25% area. The subordinated note is rated Baa3/BBB (Moody’s/Fitch), and received orders of over $8bn, ~5.3x issue size. If not called by 18 May 2033, the coupon will reset to the US 5Y Treasury yield plus 251.3bp. A capital adequacy trigger event will occur if at any time the CET1 Ratio is less than 7%. Below is a table comparing the new issuance with its peers.

Toyota Motor Credit raised $2bn via a three-trancher. It raised:

$800mn via a 2Y bond at a yield of 4.299%, 25bp inside initial guidance of T+60bp area
$400mn via a 2Y FRN at a yield of SOFR+48bp vs. initial guidance of SOFR equivalent area
$800mn via a 5Y bond at a yield of 4.596%, 27bp inside initial guidance of T+80bp area

The senior unsecured notes are rated A1/A+/A+. Proceeds will be used for general corporate purposes.

Verizon raised $4bn via a dual-trancher. It raised $2bn via a 32NC7 bond at a yield of 6.05%, 45bp inside initial guidance of 6.5% area. It also raised $2bn via a 30NC10 bond at a yield of 6.20%, 42.5bp inside initial guidance of 6.625% area. The junior subordinated notes are rated Baa2/BBB-/BBB. Proceeds will be used for general corporate purposes, including repayment of outstanding debt.

ICBCIL Finance raised $600mn via a 3Y FRN at SOFR+48bp, 57bp inside initial guidance of SOFR+105bp. The senior unsecured note is rated A1/A (Moody’s/Fitch). Proceeds will be used to finance and/or refinance eligible green and/or social assets. ICBC Financial Leasing Co Ltd. will provide a keepwell and liquidity support deed and a deed of asset purchase.

Bank of China Panama raised $500mn via a 3Y FRN at SOFR+35bp, 55bp inside initial guidance of SOFR+90bp area. The senior unsecured note is rated A1/A (Moody’s/Fitch). Proceeds will be used for general corporate purposes.

ING Groep raised €1bn via a 12NC7 green Tier-2 bond at a yield of 4.277%, 30bp inside initial guidance of MS+165bp area. The subordinated note is rated Baa2/BBB+/A-. Proceeds will be used to finance and/or refinance, in whole or in part, a portfolio of eligible green loans in accordance with its green funding framework.

BMW Finance raised €2.2bn via a three-part deal. It raised:

€900mn via a 3Y bond at a yield of 3.276%, 30bp inside initial guidance of MS+75bp area
€650mn via a 5Y bond at a yield of 3.648%, 30bp inside initial guidance of MS+105bp area
€650mn via a 10Y bond at a yield of 4.111%, 30bp inside initial guidance of MS+135bp area

The senior unsecured notes are rated A2/A. Proceeds will be used for general corporate purposes.

Rating Changes

Moody’s Ratings upgrades Telecom Italia’s ratings to Ba1; outlook stable
T-Mobile US Inc. Rating Raised To ‘BBB+’ On Strong Earnings, Disciplined Financial Policy; Outlook Stable
Devon Energy Corp. Ratings Raised To ‘BBB+’ From ‘BBB’ On Merger Completion, Off CreditWatch Positive; Outlook Stable
Par Petroleum LLC Upgraded To ‘BB-‘ From ‘B+’ On Improved Financial Metrics; Outlook Stable
Deutsche Telekom Upgraded To ‘A-‘ On Stronger Cash Flows To Maintain Leverage; Outlook Stable
Avolon Holdings Ltd. Upgraded To ‘BBB’ From ‘BBB-‘ On Improving Profitability, Solid Growth Trajectory; Outlook Stable
Alliant Holdings L.P. Upgraded To ‘B+’ From ‘B’ On Improved Credit Profile; Outlook Stable
Moody’s Ratings upgrades Yes Bank’s ratings to Ba1 from Ba2; outlook stable
Moody’s Ratings downgrades Whirlpool’s CFR to Ba3; outlook remains negative
Occidental Petroleum Corp. Outlook Revised To Positive From Stable On Debt Reduction, Higher Cash Flows; Rating Affirmed

Term of the Day: Keepwell Provision

A keepwell provision is a legal agreement between a parent company and a subsidiary to ensure solvency and financial stability of the subsidiary for the duration of the agreement. Keepwell provisions are included in bond terms to offer bondholders confidence on the issuer’s ability to repay. The keepwell structure emerged around 2012-2013 to assuage concerns of investors over a bond issuer’s creditworthiness. However, it is important for investors to understand that keepwells are not a guarantee that the parent company will support the subsidiary in the event of a default, and there has previously been no precedent on the enforcement of keepwell structures.

Talking Heads

On Seeing ‘Spicier’ CPI as Inflation Week Kicks Off – Matt Hornbach, Morgan Stanley

“Ultimately it matters how all of these inflation numbers (CPI, PPI, import prices) that we get this week come together to form a PCE inflation forecast… And the question then becomes, what about all these additional costs that now companies are facing: Energy costs, costs related to building infrastructure related to AI?”

On Urging Rate ‘Prudence’ With War to Hit Growth – Luis de Guindos, ECB Vice President

“That’s why I would call for prudence: the impact on growth is going to become much more visible over the coming weeks… Even if we have a truce or a peace agreement soon, the conflict is going to leave a mark because some infrastructure has been destroyed”

On Dollar steady as Middle East peace hopes recede

Christopher Wong, OCBC

“Still, USD gains were contained, suggesting markets are not yet treating the latest headlines as a full risk-off shock”

Sarah Hammoud, CBA

“The risk is that core inflation is ⁠stronger than consensus expectations because of spillover from energy prices to other prices such as airfares and food… upside surprise to U.S. core inflation will push up U.S. interest rates and the dollar”

Top Gainers and Losers- 12-May-26*