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Bond Market News
Meta Prices Jumbo $25bn Five-Trancher
May 4, 2026
US Treasury yields eased by 4-5bp across the curve. The US ISM Manufacturing PMI reading for April came in at 52.7, lower than the surveyed 53.2. Among the sub-components, the inflationary Prices Paid Index rose to 84.6, higher than the surveyed 80.3. Separately, US President Donald Trump said that the US will work on helping guide veseels belonging to other countries out of the Strait of Hormuz.
Looking at US equity markets, the S&P and Nasdaq continued to hit record highs, rallying by 0.3% and 0.9% respectively. US IG CDS spreads were 0.5bp tighter and HY CDS spreads were 1.7bp tighter. European equity indices were closed while FTSE 100 ended marginally lower. The iTraxx Main CDS spreads were 2.3bp tighter while Crossover spreads were 7.9bp tighter. Asian equity markets have opened higher this morning.
New Bond Issues
Meta raised $25bn via a jumbo six-tranche deal.
The senior unsecured notes are rated Aa3/AA-. Proceeds will be used for general corporate purposes.
BBVA raised $1bn via a PerpNC7 AT1 bond at a yield of 7.125%, 37.5bp inside initial guidance of 7.50% area. The junior subordinated note is rated Ba1/BB+ (Moody’s/Fitch). If not called by 8 May 2033, the coupon will reset to the US 5Y Treasury yield plus 298.5bp. A trigger event will occur if the CET1 ratio of the bank or group falls below 5.125%. Proceeds will be used for general corporate purposes. Separately, BBVA also raised $1.25bn via a 5Y bond at a yield of 4.968%, 30bp inside initial guidance of T+125bp area. The senior non-preferred note is rated Baa1/A-/A-. Proceeds will be used for general corporate purposes.
Rating Changes
- Moody’s Ratings upgrades the Government of Bahamas’ ratings to Ba3 and changes the outlook to stable
- Fitch Upgrades SK hynix to ‘BBB+’; Outlook Stable
- Las Vegas Sands Upgraded To ‘BBB’ On Disciplined Financial Policy; Outlook Stable
- Eli Lilly Upgraded On Strong Cash Flow And Lower Leverage; Outlook Positive
- Domtar Corp. Downgraded To ‘CCC+’ On Weak Cash Flow Prospects And Refinancing Risk; Outlook Negative
- Conduent Inc. Ratings Lowered To ‘B-’ On Continued High Leverage And Negative Cash Flow; Outlook Negative
- Fitch Affirms Citigroup Inc. at ‘A’/’F1’; Outlook Revised to Positive
- Fitch Revises Deutsche Bank’s Outlook to Positive; Affirms IDR at ‘A-‘
- Fitch Revises Northrop Grumman’s Outlook to Positive; Affirms IDR at ‘BBB+’
Term of the Day: Trigger (for AT1s)
Triggers are an important feature of AT1s bonds and define when the loss absorption mechanism is activated. Triggers can either be mechanical or discretionary. Mechanical triggers are numerically defined and most commonly refer to the bank’s capital ratio level. Discretionary triggers, also known as point of non-viability (PONV) triggers are based on supervisors’ judgement of the bank’s solvency position. On occurrence of a trigger event, an AT1’s loss absorption mechanism kicks in, which may include a conversion to equity or a principal write-down, both of which boost the bank’s capital position.
Talking Heads
On Aegon, Barclays Noting to Prepare for Market Pain
Alex Pelteshki, Aegon Asset Management
“We think spreads will sell off but we don’t know when… doesn’t seem like there will be material flow of things flowing through that strait. Not just oil, but also fertilizers, what have you”
Felipe Villarroel, Twentyfour Asset Management
“We’re kind of waiting and seeing what’s going to happen, if the war restarts or if the Strait remains closed”
On Bond Traders Hedging for Both Cuts and Hikes After Fed Division
John Briggs, Natixis North America
“People three months ago hadn’t envisioned higher rates and given 2022, don’t want to be caught flat footed so hedge upside risk”
Ed Al-Hussainy, Columbia Threadneedle
“If the unemployment rate goes up at any point this year meaningfully, then you’re going to have to bring those future cuts back in… Even if there’s some inflation this year, you’re going to put them into 2027”
On Record-Low Spreads on EM Asia High-Grade Debt Showing Resilience
Omar Slim, PineBridge Investments
About 85% of the issuers “are essentially not impacted directly,” while almost 14% or so are but in a relatively marginal manner
Top Gainers and Losers- 04-May-26*
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