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Bond Market News
Treasury Yields Move Higher as US CPI Surges
May 13, 2026
US CPI rose by 3.8% YoY in April, higher than expectations of 3.7% and the prior month’s 3.3%. Core CPI rose by 2.8%, higher than expectations of 2.7% and the prior month’s 2.6%. Chicago Fed President Austan Goolsbee said that the inflation report was worse than expected and indicated that the pick up in services inflation was particularly worrying. Separately, the US Treasury’s 10Y note auction saw soft demand, with a bid-to-cover ratio of 2.40x (softer than the prior auction’s 2.43x). On the back of the above developments, US Treasury yields continued to march higher, by 3-4bp across the curve. The 30Y Treasury yield steadied beyond the 5%, having previously breached the mark in mid-2025.
Looking at US equity markets, the S&P and Nasdaq ended lower by 0.2% and 0.7% respectively. US IG CDS spreads were 0.1bp wider and HY CDS spreads were 1.8bp wider. European equity markets ended lower. The iTraxx Main CDS spreads were 1.9bp wider while the Crossover spreads widened by 7.7bp. Asian equity markets have opened higher this morning. Asia ex-Japan CDS spreads were unchanged.
New Bond Issues
ArcelorMittal raised $1bn via a 10Y bond at a yield of 5.485%, 28bp inside initial guidance of T+130bp area. The senior unsecured note is rated Baa2/BBB. Proceeds will be used for general corporate purposes.
Shandong Hi-Speed raised $300mn via a 3Y bond at a yield of 4.25%, 55bp inside initial guidance of 4.80% area. The senior unsecured note is rated A by Fitch, and guaranteed by Shandong Hi-Speed Group Co Ltd. The note has a change of control put at 101. Proceeds will be used for refinancing offshore debt.
Greentown China raised $300mn via a 3NC2 bond at a yield of 7.55%, 50bp inside initial guidance of 8.05% area. The senior unsecured note is rated B1 by Moody’s, and guaranteed by certain restricted subsidiaries incorporated outside the PRC. The note has a change of control put at 100. Proceeds will be used for refinancing offshore debt.
UniCredit raised €1.25bn via a 10NC5 Tier-2 bond at a yield of 4.231%, 30bp inside initial guidance of MS+160bp area. The subordinated note is rated Baa3/BBB-/BBB.
Nordea Bank raised $1bn via a dual-trancher. It raised $700mn via a 3Y bond at a yield of 4.443%, 23bp inside initial guidance of T+65bp area. It also raised $300mn via a 3Y FRN at SOFR+60bp vs. initial guidance of SOFR equivalent area. The senior preferred notes are rated Aa2/AA-/AA.
Liberty Utilities Co raised $1.15bn via a dual-trancher. It raised $650mn via a 5Y bond at a yield of 5.102%, 27bp inside initial guidance of T+125bp area. It also raised $500mn via a 10Y bond at a yield of 5.693%, 27bp inside initial guidance of T+150bp area. The senior unsecured notes are rated Baa2/BBB/BBB+. Proceeds will be used to repay its ~$690mn intercompany loan to AQN (its indirect parent), make a loan to LUA for repaying existing amounts owed to AQN.
PayPal raised $3bn via a three-trancher. It raised:
- $650mn via a 2Y bond at a yield of 4.596%, 30bp inside initial guidance of T+90bp area
- $850mn via a 5Y bond at a yield of 4.972%, 25bp inside initial guidance of T+110bp area
- $500mn via a 10Y bond at a yield of 5.563%, 25bp inside initial guidance of T+135bp area
The senior unsecured notes are rated A3/A-/A-. Proceeds will be used for general corporate purposes, including repayment of its 2.65% 2026s, other outstanding debt, share repurchases, ongoing operations, capex and possible acquisitions of businesses or strategic investments.
New Bonds Pipeline
- Nan Fung $ 10Y sustainability bond
- Republic of Congo offshore bond
Rating Changes
- Fitch Upgrades AES Argentina’s IDR to ‘B-‘; Outlook Stable
- Fitch Upgrades Liquid Telecom (Liquid Intelligent Technologies) to ‘B-‘; Outlook Stable
- Mexico Outlook Revised To Negative On Weakening Fiscal Flexibility; ‘BBB’ Foreign Currency Rating Affirmed
Term of the Day: Floater/FRN
Floating Rate Bonds are also known as floaters or FRNs (floating rate notes). These are bonds with a variable interest rate unlike fixed rate bonds. Floaters are considered attractive for investors in a rising interest rate environment since the interest rate/coupon gets re-adjusted periodically (semi-annually/quarterly etc.), linked to benchmark rates such as SOFR or Euribor.
Talking Heads
On Staying Calm as Treasury Yields Surge – Ed Yardeni, Yardeni Research
“I kind of view bond yields of 4 and a quarter percent to 4 and three-quarter percent as normal — I’m not getting freaked out by it… US bond is still viewed as the safe haven, and there’s plenty of reasons to worry about things these days”
On Staying Clear of UK Bonds, Citing Risk Starmer Is Ousted – Schroders
“We’ve seen this play before where the UK looks cheap and it only gets cheaper. We’re happy to be on the sidelines… Whether it’s true or not, the received wisdom is Burnham will be gilt negative “
On Contrarian 5% Bet on 10-Year Treasuries Gaining Credibility
Steven Barrow, Standard Bank
“The view has not been dictated by the war. It’s just been enhanced by the war… Fed is probably going to keep policy too easy, structural inflationary pressures are rising… we’ve not really gone up to 5% sustainably for any period of time, doesn’t mean that we can’t do so in the future”
Top Gainers and Losers- 13-May-26*
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