
German yields edged up this week. The 2-year yield rose 5 basis points to 3.12%, and the 10-year rose 2 basis points to 3.48%. Part of last week's rush into safe German bonds reversed as worries about France and Italy eased. The gap between Italian and German 10-year yields narrowed from 114 to 109 basis points, and France's gap also shrank, though it stayed close to its widest in more than a decade. Higher oil prices added to inflation worries early in the week. Late in the week, European Central Bank President Christine Lagarde told euro area finance ministers that the ECB has tools to stop disorderly moves in government bond markets.

US Treasury yields swung widely but ended the week slightly lower. The 10-year yield briefly touched 5.36% on Wednesday, its highest level in 24 years, as oil prices jumped after attacks on Gulf shipping. Yields then fell back, mostly on Thursday, when President Trump said the US would not attack Iran again before the November midterm elections and oil prices dropped. The 10-year finished at 5.24%, down 3 basis points on the week, and the 2-year fell 4 basis points to 4.79%. Federal Reserve Governor Christopher Waller said more rate rises are likely needed, but not necessarily at every meeting.

UK gilts were the weakest of the three markets. The 10-year yield rose 7 basis points to 5.44%, and the 2-year also rose 7 basis points, to 4.89%. On Thursday the 10-year yield touched 5.53%, its highest since 2007, and the 30-year passed 6%, a level last seen in 1998. Higher oil prices add to inflation worries in the UK, where markets expect the Bank of England to raise rates in November or December. Investors are also cautious ahead of Chancellor John Healey's first budget on October 28.

In corporate bonds, BB-rated issuers now look better value than weaker single-B issuers, whose bonds held up unusually well during the recent sell-off. Bonds from non-financial companies also look safer than bank bonds while French and Italian government spreads stay wide.
Riskier government bonds led the gains. Ukraine's dollar bonds bounced back after last week's sharp fall, with the 2034, 2035 and 2036 bonds up between 3.8% and 4.2%. Romania's bonds rallied after S&P kept the country's rating at BBB-, avoiding a cut to junk, and its 2049 euro bond gained 3.7%. Food company General Mills' 2051 bond also rose 3.9%.
| Name | Cur | Price change 1w (%) |
Yield | Risk Level |
| Ukraine 4.5% Feb 2034 | USD | 4,16% | 14,20% | Very High |
| Ukraine 4.5% Feb 2035 | USD | 4,08% | 13,96% | Very High |
| General Mills 3% Feb 2051 | USD | 3,89% | 6,16% | Medium |
| Ukraine 4.5% Feb 2036 | USD | 3,77% | 13,74% | Very High |
| Romania 4.625% Apr 2049 | EUR | 3,70% | 6,82% | Medium |
| Romania 3.375% Feb 2038 | EUR | 3,14% | 6,45% | Medium |
| Romania 6.5% Oct 2045 | EUR | 2,93% | 6,84% | Medium |
| Romania 6.125% Jan 2044 | USD | 2,55% | 7,30% | Medium |
| Romania 7.5% Feb 2037 | USD | 2,48% | 7,09% | Medium |
| Romania 6.375% Jan 2034 | USD | 2,44% | 6,77% | Medium |
Riskier bonds also led the losses. The Bahamas' 2033 bond fell the most, down 4.4%. Paramount Global's 2033 and 2032 bonds lost 3.5% and 2.8% after Fitch cut the company's rating to BB, deeper into junk. German property company Aroundtown's 2032 dollar bond fell 3.2%, and US telecom group Windstream's 2032 bond lost 2.7%.
| Name | Cur | Price change 1w (%) |
Yield | Risk Level |
| Bahamas Cmnwlth 6.625% May 2033 | USD | -4,39% | 7,40% | Very High |
| Paramount Global 5.5% May 2033 | USD | -3,50% | 10,72% | High |
| Aroundtown 4.75% Mar 2032 | USD | -3,15% | 5,70% | Medium |
| Paramount Global 4.2% May 2032 | USD | -2,76% | 10,20% | High |
| Windstream Serv 8.625% Jun 2032 | USD | -2,65% | 10,04% | Very High |
| FMC 8.45% Nov 2055 | USD | -2,62% | 18,90% | High |
| CoreWeave 9.25% Jun 2030 | USD | -2,56% | 12,02% | Very High |
| Whirlpool 5.75% Mar 2034 | USD | -2,53% | 12,51% | High |
| Energy Transfer 5% May 2050 | USD | -2,44% | 6,80% | Medium |
| Walker & Dunlop 6.625% Apr 2033 | USD | -2,38% | 7,93% | High |
Note: only long-term senior unsecured ratings were taken into account.
Upgrades and downgrades were almost evenly matched this week, 24 to 23. S&P raised Swedish utility Vattenfall to A- and lifted equipment rental group United Rentals to BBB-, an investment-grade rating. Fitch moved UK insurer Beazley up two notches to AA-. On the downside, S&P cut Nike to A from A+, and Fitch lowered Warner Bros. Discovery to BB, a notch deeper into junk, as its takeover by Paramount Skydance adds a large pile of debt. Moody's also cut two Italian banks below investment grade.
| Issuer | Agency | Change |
| 1001 Vies Habitat | Moody's | A1 → A2 |
| Adira Finance | Moody's | Baa1 → A3 |
| Aena | Fitch | A → A+ |
| An Binh Bank | Moody's | B2 → B1 |
| Angi | S&P | B → B- |
| Anor Bank | Fitch | CCC+ → CCC |
| BakeMark | S&P | B- → CCC+ |
| Banca IFIS | Moody's | Baa3 → Ba1 |
| Banco BAC San José | Fitch | BB+ → BBB- |
| Banco Original | S&P | B- → B |
| Beazley | Fitch | A → AA- |
| Caparra Hills | Fitch | B+ → BB- |
| Casino Guichard-Perrachon | Fitch | CCC- → CC |
| Champion Iron | S&P | BB- → B+ |
| CHC Helicopter | S&P | B → B- |
| Cushman & Wakefield | S&P | BB- → BB |
| Europcar | S&P | B- → B |
| Freedom Mortgage | S&P | B → B+ |
| Illimity Bank | Moody's | Baa3 → Ba1 |
| KazTransOil | S&P | BBB- → BBB |
| Kommunalkredit Austria | S&P | BBB → BBB- |
| Kronosnet | S&P | B → B- |
| Kyrgyz Republic | Moody's | B3 → B2 |
| LSF12 Crown Intermediate | S&P | B- → B |
| Medical Properties Trust | S&P | SD → CCC+ |
| Nike | S&P | A+ → A |
| Notting Hill Genesis | Moody's | A3 → Baa1 |
| Oscar Acquisitionco | S&P | D → CCC+ |
| OSTTRA | Fitch | B → B+ |
| Paradigm Parent | S&P | B → B- |
| Paramount Skydance | Fitch | BB+ → BB |
| Republic of Ghana | Moody's | Caa1 → B3 |
| Republic of Maldives | Moody's | Caa2 → Caa1 |
| Sazerac | S&P | BB- → BB |
| South West Water | Moody's | Baa1 → Baa2 |
| Superannuation & Investments Finco | S&P | BB- → BB |
| Swisscard AECS | Fitch | A- → A |
| Syniverse | S&P | CCC → D |
| TalkTalk | S&P | CCC+ → D |
| Telefónica Móviles Chile | S&P | BB- → B+ |
| Titan Cement | S&P | BB+ → BBB- |
| TTF Lower Intermediate | S&P | B → B- |
| United Rentals | S&P | BB+ → BBB- |
| Valloire Habitat | Moody's | A1 → A2 |
| Vattenfall | S&P | BBB+ → A- |
| Warner Bros. Discovery | Fitch | BB+ → BB |
| Xplore | S&P | CCC+ → CCC |
New bond sales stayed slow as high borrowing costs kept many companies away. US companies sold only about $11 billion of bonds, well below what dealers had expected, and European sales also came in under forecasts. The table shows only bonds sold in small lots, with a minimum investment of 2,000 or less in the bond's currency. Deals sold only in large blocks, or only to big US institutional investors, are left out. In dollars, food group Cargill raised $1.25 billion at yields of 5.4% to 6.1%, adhesives maker H.B. Fuller paid 7.6% on an 8-year bond, and concert promoter Live Nation sold a 6-year bond at 7.1%. In euros, the German states of North Rhine-Westphalia and Lower Saxony borrowed €2.25 billion between them at about 3.8%.
| Issuer | Size | Term | Yield | Risk Level |
| ADI Escrow Issuer | USD 1,0bn |
7Y | 8,9% | Very High |
|
ISIN (CUSIP)
USU0380GAA95
|
||||
| Atmos Energy | USD 0,70bn |
10Y | 6,0% | Low |
|
ISIN (CUSIP)
US049560BG91
|
||||
| Bayerische Landesbank | EUR 0,25bn |
2Y | FLOAT, +17bp | Very Low |
|
ISIN (CUSIP)
DE000BYL0R42
|
||||
| Cantor Fitzgerald | USD 0,50bn |
3Y | 6,4% | Medium |
|
ISIN (CUSIP)
USU13809AN51
|
||||
| Cargill | USD 1,25bn |
3–10Y | 5,4–6,1% | Low |
|
ISIN (CUSIP)
USU14178FS86…USU14178FT69
|
||||
| CSLB Holdings | USD 1,5bn |
7–10Y | 5,9–6,2% | Low |
|
ISIN (CUSIP)
USU1276AAA70…USU1276AAB53
|
||||
| Eclipse Acquisitions Merger Sub | USD 0,80bn |
5Y | 10,0% | Very High |
|
ISIN (CUSIP)
USU2548TAA61
|
||||
| Free State of Saxony | EUR 0,50bn |
7Y | 3,7% | Very Low |
|
ISIN (CUSIP)
DE0001789436
|
||||
| H.B. Fuller | USD 0,85bn |
8Y | 7,6% | High |
|
ISIN (CUSIP)
US40410KAB17
|
||||
| Integra LifeSciences | USD 0,45bn |
7Y | 9,5% | Very High |
|
ISIN (CUSIP)
USU4579BAA36
|
||||
| Inter-American Development Bank | USD 1,0bn |
4Y | FLOAT, +30bp | Very Low |
|
ISIN (CUSIP)
US4581X0FC78
|
||||
| International Development Association | EUR 1,0bn |
30Y | 4,3% | Very Low |
|
ISIN (CUSIP)
XS3538132773
|
||||
| L-Bank Baden-Württemberg | GBP 0,30bn |
5Y | 5,0% | Very Low |
|
ISIN (CUSIP)
XS3534736973
|
||||
| Live Nation Entertainment | USD 0,73bn |
6Y | 7,1% | High |
|
ISIN (CUSIP)
U53897AK7 (RegS)
|
||||
| MSD Investment | USD 0,35bn |
3Y | 7,1% | Medium |
|
ISIN (CUSIP)
USU6076BAE84
|
||||
| Nordic Investment Bank | GBP 0,20bn |
5Y | FLOAT, +25bp | Very Low |
|
ISIN (CUSIP)
XS3518483675
|
||||
| Scentre Group | USD 0,75bn |
10Y | 6,2% | Low |
|
ISIN (CUSIP)
USQ8352BAF15
|
||||
| Spire Missouri | USD 0,35bn |
10Y | 6,2% | Low |
|
ISIN (CUSIP)
US84859DAE76
|
||||
| State of Lower Saxony | EUR 1,0bn |
8Y | 3,8% | Very Low |
|
ISIN (CUSIP)
DE000A5GS7U5
|
||||
| State of North Rhine-Westphalia | EUR 1,25bn |
10Y | 3,8% | Very Low |
|
ISIN (CUSIP)
DE000NRW0Q07
|
||||