Global credit market starts to sputter as jumbo deals drag

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeFinanceGlobal credit market starts to sputter as jumbo deals dragSpreads on global corporate bonds have blown out about 5 basis points this weekAuthor of the article:A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell, in New York City on Sept. 28, 2026. Photo by CHARLY TRIBALLEAU / AFP via Getty ImagesGlobal credit markets have started to show signs of caution, as investors pull back from treating the asset class as a safe haven following record borrowings and growing concerns about balance sheets as inflation persists.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountSpreads on global corporate bonds have blown out about five basis points this week, the most since March. That leaves them at their widest in half a year, according to a Bloomberg index. Trading at the start of the global day in Asia on Friday pointed toward more selling, with yield premiums on investment-grade notes increasing 2 to 4 basis points, traders said.This advertisement has not loaded yet, but your article continues below.The weakness in credit contrasts with gains in Treasuries after mostly dovish comments from United States Federal Reserve officials. The divergence stands out. Credit has held up well in the past year even when sovereign debt was slumping, prompting many investors to take the view that some companies are safer bets than even the most powerful governments. But record bond sales recently from Paramount Skydance Corp. to SoftBank Group Corp. have added to a surge in supply of corporate debt that’s now giving money managers pause.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try again“It’s that choppiness that keeps people away from the market,” said Sheldon Chan, a portfolio manager for Asian and Emerging market credit at T. Rowe Price Group.While credit markets remain at historically stronger levels despite the stumbles in recent weeks, a number of signals are showing growing investor caution.After Paramount Skydance Corp. issued US$52 billion of debt this week to fund the biggest Hollywood buyout ever, its junk notes were among the hardest hit in initial trading. That came just days after SoftBank pushed through a US$11.1 billion junk debt deal for which it had to pay record yields, including 9.75 per cent on a 7.5-year bond, in an effort to fund its massive AI ambitions.This advertisement has not loaded yet, but your article continues below.“The bigger question is where do things go from here. It’s down to the macro and economic setup,” Chan said. The longer term view in the U.S. is more uncertain, given economic growth is still good, he said. “There could be more upward pressure on U.S. rates going forward.”Elsewhere in the riskier parts of the U.S. debt market, spreads jumped above 1,000 basis points over Treasuries for the first time since the regional banking crisis in 2023. That follows a steady rise since April as investors began to anticipate the Fed’s next rate hike.Still, not all investors see a rate move as an indication of underlying stress.“Demand for capital is driving real rates higher. And it’s the rise in real rates that has pulled yields higher,” Pacific Investment Management Co. President Christian Stracke said in an interview on Bloomberg TV Friday. “What is healthy is that it’s all about the supply and demand for capital and much less about fears of a disorderly rise in inflation expectations.”With assistance from Janice Huang, Dipika Lalwani and Harry SuhartonoThis advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.