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Bond Market News
Indonesia, ABN Amro, Barclays Launch Bonds
May 19, 2026
US Treasury yields eased by 3-4bp across the curve. US President Donald Trump said that the US will “hold off” a scheduled attack on Iran following requests from other Gulf countries. He added that “serious negotiations” are now underway, aiming for a deal to be reached soon.
The S&P and Nasdaq ended lower by 0.1% and 0.5% respectively on Monday. US IG CDS spreads tightened by 0.4bp and HY CDS spreads were 0.2bp tighter. European equity markets ended higher. The iTraxx Main CDS spreads were 0.6bp tighter and Crossover spreads tightened by 1.7bp. Asian equity markets have opened in the green this morning. Asia ex-Japan CDS spreads were 1.5bp wider. China’s macroeconomic data showed a slowdown in indicators. For instance, fixed asset investments contracted by 1.6% in April vs. estimates of a 1.7% growth. Industrial production grew by 4.1% YoY, softer than the surveyed 6.0%. Also, Retail sales growth softened to 0.2%, vs. expectations of 2.0%.
New Bond Issues
- Indonesia $ 5Y/10Y at 5.3/5.95% area
- ABN AMRO $ 5Y FRN at SOFR+100bp area
- Barclays A$ PerpNC6.5 AT1 at 8.375% area
Schwab raised $2.25bn via a dual-trancher. It raised $1bn via a 4NC3 bond at a yield of 4.744%, 27bp inside initial guidance of T+85bp area. It raised $1.25bn via a 11NC10 bond at a yield of 5.493%, 28bp inside initial guidance of T+115bp area. The senior unsecured notes are rated A2/A-/A. Proceeds will be used for general corporate purposes.
OCBC raised $500mn via a 3Y FRN at SOFR+47bp, 33bp inside initial guidance of SOFR+80bp area. The senior unsecured note is rated Aa1/AA-/AA-. Proceeds will be used for general corporate purposes.
Blue Owl Capital raised $400mn via a 5Y bond at a yield of 6.571%, 30bp inside initial guidance of T+260bp area. The senior unsecured note is rated Baa2/BBB-/BBB. Proceeds will be used to pay down certain OBDC’s existing debt, including those under its revolving credit facility (RCF) and/or its 3.4% 2026s.
Merck & Co raised $6bn via a seven-part deal. Details are given in the table below: 
The senior unsecured notes are rated Aa3/A+. Proceeds will be used to repay all outstanding debt under its credit agreement, to finance a portion of the consideration for its Terns Acquisition and related fees and expenses.
New Bonds Pipeline
- Republic of Congo offshore bond
- Oman Arab Bank $ PerpNC5.5 AT1 bond
- Lufthansa mandates for EUR-denominated bond
Rating Changes
- Fitch Upgrades CNP Assurances’ IFS Rating to ‘A+’; Outlook Stable
- Fitch Upgrades Ovintiv to ‘BBB’; Outlook Stable
- Moody’s Ratings downgrades CSN’s ratings to Caa1, negative outlook
- Fitch Downgrades DTEK OIL & GAS PRODUCTION to ‘RD’ on DDE; Upgrades to ‘CC’
- Fitch Downgrades China Vanke to ‘RD’
- Fitch Downgrades VF Ukraine to ‘CCC-‘
- Outlooks On Dominion Energy and VEPCO Revised To Positive On Announced Merger With NextEra Energy Inc.; Ratings Affirmed
Term of the Day: Change of Control Put
Change of control put is a common covenant in bond offerings, mentioned in the bond’s prospectus. Bonds that carry a change of control put offer bondholders the option to sell the bonds back to the issuer at a pre-defined price upon the occurrence of a change of control event, which is typically a change in ownership of the issuer. The option to redeem the bonds in this case lies with the bondholder, as against a call option, which lies with the issuer, not the bondholder.
Talking Heads
On Warning Stock Rally at Risk From Bond Rout – Mike Wilson, Morgan Stanley
“We would expect the first meaningful correction in equity prices since markets bottomed at the end of March… While a widespread earnings recovery is gaining momentum, market participants are generally not positioned for it”
On Soaring Japanese Bond Yields Showing Fiscal Worries
Kiyoshi Ishigane, MUFJ Asset Management
“I believe we will see a shift from stocks to bonds going forward. As there may still be room for interest rates to rise, I don’t think there’s a need to rush out and buy bonds”
Zhiwei Zhang, Pinpoint Asset Management
“Regardless of when the war will end, even if geopolitical conflicts ease, oil prices may continue to remain high”
Eugene Leow, DBS Bank
“We got a warning shot from JGBs in the early part of the year…. The current situation feels more like a rolling repricing across the DM space”
Frances Cheung, OCBC
“A wider term premium is priced into long-end JGBs, partly because of the fiscal impact of high oil prices”
On Inflation Uptick Starting to Send Sell Signals to Stock Bulls
Adam Turnquist, LPL Financial
“Equity investors are focused on the micro – they’re looking at earnings, and they are great. The macro environment is certainly not as optimistic as the equity market”
Ed Clissold, Ned Davis Research
“If inflation pressures continue to build up, in three or more months, the odds of a rate hike would increase and that could be a surprise to the markets”
Top Gainers and Losers- 19-May-26*
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