Latest news with #investmentgrade
Al Arabiya
22-07-2025
- Business
- Al Arabiya
Analysis: De-risking mood adds more demand for US corporate bonds
Investors have begun to de-risk their equity portfolios and buy more investment-grade corporate bonds as US stock indices near new record highs, in turn pushing corporate borrowing costs to their tightest levels since 1998 for the second time in eight months. Credit spreads have recovered since they were forced sharply wider on April 2, or 'Liberation Day,' when President Donald Trump announced trade tariffs and the market became uneasy about corporate fundamentals in a potential environment made susceptible to inflationary pressures and slower economic growth. The average investment-grade bond spread last stood at 80 basis points (bps), which is just 3 bps away from its lowest point of 77 hit in 1998 and had previously touched last November, according to ICE BAML data. It had touched 121 bps, or its highest since November 2023, in the days after Liberation Day. The recovery has come on the back of optimism, confirmed by recent corporate earnings, that the highest-rated companies had used the past year to reform balance sheets by paying down debt, avoiding costly acquisitions, and were prepared for an economy impacted by the inflationary impulse of tariffs or a trade war. 'The sharp tightening of credit spreads seen since Liberation Day is based on perception that trade and tariff risks have peaked... it also can be attributed to investors' confidence in US corporate fundamentals,' said Edward Marrinan, credit strategist at SMBC Nikko Securities. The Federal Reserve's reluctance to cut interest rates substantially, with inflation still stubbornly above preset targets, has also kept corporate bond yields high enough to attract strong demand from yield-focused investors like insurance companies and pension funds. But worries that corporate valuations are nearing a peak have also prompted some investors to shift money from equities to investment-grade corporate bonds, adding an extra level of pressure on credit spreads, said bankers. This heightened investor demand coupled with an overall market shift out of equities into debt could push spreads tighter in the coming months, said Michael Levitin, managing director and co-head of liquid credit at asset management firm MidOcean Partners. 'For the first time that I can think of in my career, we're seeing a shift out of equities into debt,' he added, noting it was driven by those beginning to realize they may not get the same return out of equities as they did before. 'We have had more conversations, interest in credit strategies and investment-grade fixed income given the run-up in equities,' said Nick Elfner, co-head of research at Breckinridge Capital Advisors. About $10 billion has moved out of domestic equity funds and ETFs since the beginning of 2025, at the same time as over $180 billion has flowed into taxable bond funds and ETFs, according to data from the Investment Company Institute. This reflects the added demand for fixed income, Elfner noted. Companies in the meantime are taking full advantage of this rush of demand for their bonds and raising new debt, while paying little to no new-issue premium as order books are heavily oversubscribed. The average new issue concession on nearly $51 billion of corporate bonds issued in July was a measly 2 bps with order books covered by over four times, according to Informa Global Markets data. To be sure, analysts and strategists expect this dream run in spreads to reverse, albeit gradually, in the second half, especially if the current optimism about the tariff impact on credit fundamentals is found to be misplaced. 'Our base case for (investment grade) credit spreads is widening, not tightening, as we have a forecast of 110 bps through year-end, but that number is still well within the long-term median level for spreads (of) 130 bps,' said Winnie Cisar, global head of strategy at CreditSights. Companies have had a lot of power to push through pricing to consumers and maintain strong margins despite these macroeconomic headwinds - yet a period of rising interest rates means interest coverage has come down from record highs in 2021 and created a mixed picture for credit fundamentals, Cisar added. 'If interest expense is somewhat elevated and concerns grow around the trajectory for growth and profit margins, that could act as a catalyst for a widening in spreads.'
Bloomberg
16-07-2025
- Business
- Bloomberg
JPMorgan Kicks Off US Bank Bond Sales Ahead of Seasonal Slowdown
JPMorgan Chase & Co. is tapping the US investment-grade bond market Wednesday, kicking off what's expected to be a relatively light season for bank bond sales ahead of expected changes to sector regulations. The lender is marketing 11-year subordinated notes that are fixed-to-floating rate and that can't be called for 10 years, according to a person familiar with the matter. Initial price discussions call for a yield around 1.4 percentage points above similarly dated Treasuries, said the person, who was not authorized to speak publicly.
Bloomberg
16-07-2025
- Business
- Bloomberg
New Lawsuit on Environmental Disaster Adds to Braskem Bond Woes
Braskem SA 's dollar bonds are under renewed pressure after the Brazilian state of Alagoas filed a 4 billion-real ($717 million) lawsuit tied to damage caused by the collapse of one of the company's mines. It's the latest chapter of an environmental disaster that has dragged on for years in northeastern Brazil, costing the petrochemical giant its investment-grade status in 2023. The new lawsuit, filed last week, is seeking compensation for damages suffered by residents living along the edge of the affected zone in Maceió, Alagoas said in a statement. Braskem's 2034 notes fell 3 cents on Monday following the news.
Zawya
14-07-2025
- Business
- Zawya
Oman's return to investment grade is a national milestone
There are few moments in a nation's economic journey that genuinely signal a turning point. Oman's recent upgrade by Moody's to investment grade status — after nearly a decade below that line — is one of those moments. On July 11, 2025, Moody's Investors Service officially lifted the Sultanate's sovereign credit rating from Ba1 to Baa3, restoring the country's position among the world's most trusted borrowers. For the average citizen, that may sound technical. But for those tracking Oman's economic transformation over the past few years, it reads like a stamp of international confidence — earned through persistence, policy reform, and national vision. Unlike flashy economic turnarounds that make headlines with sudden oil booms or mega projects, Oman's comeback has been quiet, deliberate, and disciplined. Since the oil price crash of 2014, which rattled public finances across the Gulf, Oman has been steadily fixing its house — reducing debt, rationalising spending, and making every rial count. By the end of 2024, Oman had cut its public debt ratio to 35.5% of GDP, down from 37.5% just a year before — and significantly below the alarming levels of the early 2020s. More importantly, the government's grip on public spending has tightened. Public expenditure, which averaged 41% of GDP between 2016 and 2020, now sits at a leaner 29%. Even more impressive is the drop in Oman's fiscal break-even oil price — the point at which oil revenues cover government spending. From a risky USD 84 per barrel just a few years ago, that number has fallen to USD 70. That shift means Oman is less vulnerable to sudden oil market swings — a critical safeguard in a turbulent global economy. And the results don't stop there. The cost of debt servicing, which used to consume 9% of total revenues in 2021, was reduced to 7.2% in 2024. Meanwhile, real GDP grew by 1.7%, inflation stayed under control at 0.7%, and the country recorded both a fiscal surplus (2.8% of GDP) and a current account surplus (2.1%). These are not abstract achievements. They are the tangible outcomes of a government choosing the long road over the easy one — resisting quick fixes and instead building economic resilience brick by brick. Moody's didn't simply reward good numbers. The upgrade reflects a deeper shift: a belief that Oman's economic direction is sustainable and credible. That belief matters. Credit ratings influence how much governments pay to borrow money, how foreign investors assess risk, and how global markets perceive long-term economic health. Being rated investment grade means Oman is once again seen as a safe, stable, and forward-looking country — not just within the Gulf, but on the international stage. The recognition also brings renewed investor interest. From sovereign bond markets to foreign direct investment, Oman is now better placed to secure funding on more favourable terms — essential for pushing forward with large-scale infrastructure, energy transition, and industrial diversification plans. It would be easy to attribute this upgrade to a good year of oil prices or a temporary fiscal surplus. But that would miss the larger picture. Oman's return to investment grade is rooted in Vision 2040, the national blueprint launched to steer the Sultanate toward a more diversified, competitive, and inclusive economy. That vision has translated into real policy — from restructuring public finances and reforming state-owned enterprises, to promoting SMEs, tourism, logistics, green hydrogen, and technology. The fruits of these efforts are now beginning to show — not just in the rating agencies' assessments, but in the underlying fundamentals of the economy. In fact, the Moody's report echoes a message Omani policymakers have been emphasising for years: fiscal discipline, when paired with strategic diversification, works. It strengthens credibility, lowers risk, and creates space for long-term growth. Despite this success, Oman cannot afford to let its guard down. Moody's made clear that the road ahead will require continued fiscal prudence and faster progress in reducing reliance on oil revenues. The non-oil primary deficit — a key measure of underlying sustainability — still needs attention. Likewise, non-oil growth must become more robust to cushion any future shocks. This is where the next chapter begins. Investment grade should not be treated as a finish line, but as a launchpad. It gives Oman the global trust it needs to attract capital — but now the focus must shift to ensuring that growth is broad-based, digitally enabled, climate-conscious, and youth-driven. Perhaps the most important takeaway from this upgrade is not what it says about global markets — but what it says about Oman itself. In a region often viewed through the lens of oil dependency, Oman is charting a different course — one grounded in responsibility, reform, and realism. The Moody's upgrade is a recognition of that quiet confidence — and a reminder that economic credibility isn't claimed through promises; it's earned through choices. For investors, this is an invitation to look again at Oman. For citizens, it's a reassurance that the country is on firmer ground. And for policymakers, it is a moment of validation — and a reminder to keep going. Because in the end, ratings may change — but national vision endures. 2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (
Yahoo
12-07-2025
- Business
- Yahoo
Mercado Libre (MELI) Earns Full Investment Grade Status from S&P
MercadoLibre, Inc. (NASDAQ:MELI) is one of the top e-commerce stocks with long-term potential. On July 11, 2025, S&P Global Ratings upgraded Mercado Libre (NASDAQ: MELI) to an investment-grade rating of 'BBB-' with a Stable Outlook—following Fitch's similar upgrade in October 2024. This milestone confirms the company's strong financial standing and makes it fully recognized as an investment-grade firm across two major agencies. S&P's report praised Mercado Libre's solid operating performance, growing profitability, and conservative financial management, with debt metrics expected to remain well within safe thresholds. The rating also reflects the strength of its integrated ecosystem, spanning marketplace, logistics, fintech, and advertising, with a dominant presence in Brazil and Mexico. CFO Martín de los Santos celebrated the upgrade as validation of the company's disciplined execution and long-term growth strategy. Key drivers include rising demand for its digital financial services, expanding credit portfolio, and continued investment in shipping and infrastructure—especially in markets like Brazil, Mexico, and Chile. MercadoLibre, Inc. (NASDAQ:MELI) is Latin America's leading e-commerce and fintech platform, operating in 18 countries. It provides a wide range of digital tools that help individuals and businesses buy, sell, pay, and manage money online. With a mission to democratize access to commerce and financial services, the company continues to transform lives through locally tailored technology. While we acknowledge the potential of MELI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 15 Successful Spin-Off Companies and Their 2025 Returns and 12 Best Consumer Goods Stocks Billionaires Are Quietly Buying. Disclosure: None. This article is originally published at Insider Monkey. Se produjo un error al recuperar la información Inicia sesión para acceder a tu portafolio Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información
