Corporate Credit Highlights

• Goldman Sachs on IG all in yield remaining attractive:  “Despite recent market volatility, IG cash has held up extremely well and its spread currently remains within the 10th %-tile on a 20 year lookback. One thing we think provided support to IG cash is the attractive all-in yield. Using iBoxx IG as proxy, current all-in yield sits at the 91st %-tile on a 10y lookback, mostly driven by rates.” ¹‍
• Deutsche Bank Strategy on IG and HY supply:  “Along with more duration, $IG supply continues to see a heavier concentration of higher-rated issuers. It was a record month for $AA issuance ($60.8bn), after February 2026 had been the second busiest month for $AA supply. The Amazon deal injected a substantial amount of $AA paper into the market, following the Alphabet deal in February. Additionally, there was another big Healthcare deal that added to the $AA supply on the back of an M&A deal. Eschewing December and January, we have now seen at least one jumbo hyperscaler deal per month going back to September. We mentioned in our quarterly outlook update that we think this pace will slow in the coming months, especially after Meta announces. Overall in $IG, Consumer Cyclicals issued $54bn (including the Amazon deal) to lead all sectors, followed by $35bn from Technology, $34bn from Banks, and 28bn from Cap Goods firms.” ²‍
• BAML Strategy raising their hyperscaler supply forecast for 2026:  “We are raising our FY26 issuance forecast for the 5 IG hyperscalers to $175B from $140B to reflect Amazon's ~$54B bond issuance across USD and EUR following the announcement of its investment in OpenAI ($50B total incl. $15B upfront), which was not included in our prior estimate. There has been $110B issued to date in 2026, including $82B in USD.  We expect another ~$65B of issuance for the rest of 2026, which could be positive for spreads if the bulk of issuance is behind us. This comprises ~$30B from Meta, $20B from Microsoft and ~$15B additional issuance from Alphabet (Feb issuance mainly to fund Wiz acquisition, which closed on March 11th, 2026). Our methodology is based on preserving cash balances near past levels ($420B at YE'25 vs. $346B at YE'24), inclusive of debt maturities and strategic uses of cash.” ³
• Citadel on Fixed Income ETF volumes last month: “March 2026 was the highest trading value month on record for US fixed income ETFs (and ETFs overall) clearing both 2020 and 2025 peaks.” ⁴

• Citi Strategy on reasons for loan market resilience this month:  “The relative resilience of loans was surprising considering the persisting software and private credit headlines in recent weeks. The Morningstar/LSTA Loan Index is on track for its best monthly return versus the Bloomberg High Yield Index since September 2023. To date, loans lead bonds by 1.73% (+0.67% vs -1.06%).  We see two factors supporting the loan market in March.  First, the Treasury bear steepening reflects waning expectations the Fed will resume its intermittent cutting cycle as the Mideast conflict has driven oil prices to 4-year highs. Year-end rate expectations now reflect a one-third hike, reversing the two plus cuts expected in late February. Second, there seems to be a temporary truce on the AI-exposed software sector which has rebounded slightly in March after February’s drop.” ⁵

• Goldman Sachs Strategy update to their 2026 return forecasts:  “We forecast full-year USD IG and HY figures of 5.1% and 6.1%, respectively, compared to year-to-date total returns of -0.4% and -0.1%. Our full-year total return forecasts incorporate our rates strategists’ forecasts for US Treasuries (which call for the 10-year to close 2026 at 4.10%).  These forecasts would place 2026 full-year total returns around median levels compared to the past 35-years.” ⁶‍
• JP Morgan Strategy on recent secondary trading volumes in IG and HY:  “In 1Q26, the average daily trading volume for HG bonds was $48.1bn/day and for HY bonds it was $18.8bn/day, per TRACE. This is 18.5% higher for HG and 9.4% higher for HY vs. 1Q25.” ⁷

Definitions
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• Assets under management (AUM) is the total market value of the investments managed by a person or entity on behalf of investors.
• Bank loans (also known as floating-rate loans or leveraged loans) invest in bonds and other fixed-income securities that have variable, as opposed to fixed, interest rates.
• A basis point is one hundredth of a percent, so 100 basis points is equivalent to 1%.
• A bond isa fixed-income instrument and investment product where individuals lend money to a government or company at a certain interest rate for an amount of time. The entity repays individuals with interest in addition to the original face value of the bond.
• Broadly syndicated loans (BSL) are a type of loan that will typically be arranged by an investment bank and then syndicated to a large group of commercial banks and specialist loan investors.
• Capital expenditure is the money spent on acquiring or maintaining fixed assets, such as land, buildings, and equipment.
• Collateralized loan obligation (CLO) is a structured financial product that bundles a pool of lower-rated corporate loans and sells them to investors in tranches with different risk/return profiles.
• A corporate bond isa debt security that is issued by a company to raise capital.
• A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity.
• The credit market refers to the marketplace through which companies and governments issue debt to investors in exchange for regular interest payments. ‍
• Credit rating is when bond ratings are grades given to bonds that indicate their credit quality as determined by private independent rating services such as Standard &Poor's, Moody's and Fitch. These firms evaluate a bond issuer's financial strength, or its ability to pay a bond's principal and interest in a timely fashion. Ratings are expressed as letters ranging from `AAA', which is the highest grade, to `D', which is the lowest grade.
• Credit spread is the difference in yield between two debt securities with the same maturity but different credit quality.
• Derivative is a type of financial contract whose value is dependent on an underlying asset, a group of assets, or a benchmark. It's an agreement set between two or more parties that can be traded on an exchange or over the counter.
• ‍Duration is often used to measure a bond’s or fund’s sensitivity to interest rates. The longer a fund’s duration, the more sensitive it is to interest-rate risk. The shorter a fund’s duration, the less sensitive it is to interest-rate risk.
• Distressed Exchange is a negotiation process between a financially troubled company and its creditors where the company seeks to restructure its debt without filing for bankruptcy.
• EBITDA (earnings before interest, taxes, depreciation, and amortization) is a standard of measurement banks use to judge a business’ performance.
• A Fallen Angel is a bond that was initially given an investment-grade rating but has since been reduced to a junk bond status.
• ‍High-yield bonds (or junk bonds) are bonds that pay higher interest rates because they have lower credit ratings than investment-grade bonds.
• The ICE BofA US Corporate Index isa benchmark index that tracks the performance of investment grade corporate debt in the United States.
• Investment grade refers to the quality of a company's credit. To be considered an investment grade issue, the company must be rated at 'BBB' or higher by Standard and Poor's or Moody’s.
• Investment Grade (IG) Index refers to the ICE BofA US Corporate Index.
• An issue or issuance is a process of offering securities in order to raise funds from investors. Companies may issue bonds or stocks to investors as a method of financing the business.
• Implied default rate is a measure of the market's perception of the likelihood that a borrower will default on their debt obligations.
• ‍Leverage refers to using debt (borrowed funds) to amplify returns from an investment. A leveraged loan is a type of loan made to borrowers who already have high levels of debt and/or a low credit rating. Lenders consider leveraged loans to have an above-average risk that the borrower will be unable to pay back the loan (also known as the risk of default).
• ‍Leveraged Buyout is the acquisition of a company primarily using borrowed funds, often secured by the assets and cash flows of the acquired company.
• Liquidity refers to the efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price.
• Maturity (or maturity wall) is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist.
• Mergers and Acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorption, a merger, a tender offer or a hostile takeover.
• Morningstar LSTA US Leveraged Loan Index is a market-value weighted index designed to measure the performance of the US leveraged loan market.
• Mortgage-backed securities (MBS) are investment products backed by a pool of mortgage loans.
• Net debt / EBITDA ratio is a type of leverage ratio used to determine if a borrower generates sufficient operating cash flows to meet its mandatory interest obligations and pay down its outstanding debt balance in full at maturity.
• ‍Option adjusted spread (OAS) is the measurement of the spread of a fixed-income security rate and the risk-free rate of return.
• Par-weighted refers to a method of calculating averages where the individual values are weighted by their par (face) value. This means that larger holdings or transactions have a greater influence on the final average.
• Post-GFC refers to the period following the Global Financial Crisis (GFC), which began in 2007-2008. This period is characterized by economic recovery, changes in financial regulation, and evolving global financial systems.
• A refinance (ReFies) refers to the process of revising and replacing the terms of an existing credit agreement, usually as it relates to a loan or mortgage.
• ‍Spread is the measurement of the spread of a fixed-income security rate and the risk-free rate of return, represented by Treasury bonds. Spread income refers to the additional income from this difference.
• The 10-year treasury bond yield is the interest rate the U.S. government pays to borrow money for a decade, serving as a benchmark for other interest rates and a key indicator of investor sentiment about economic conditions.
• Total Return, when measuring performance, is the actual rate of return of an investment or a pool of investments over a given evaluation period.‍
• Weighted Average Coupon is the average gross interest rate of the underlying mortgages in a mortgage-backed security at the time it was issued.
• Weighted-Average Rating Factor (WARF) is a numerical representation of the credit risk of a portfolio calculated by Moody’s.
• ‍Yield isa measure of the profit that an investor will be paid for investing in a stock or a bond. It is usually computed on an annual basis.
• Yield to worst (YTW) estimates the lowest possible return on a bond without the issuer defaulting.