In bond markets, as the Iran war entered its seventh week, ceasefire negotiations bolstered market optimism and lowered corporate bond credit spreads down to pre-war levels–a favourable opportunity for US banks to take advantage of lower borrowing rates amidst first-quarter earnings results. With markets hopeful that an end to the conflict is in sight, bond prices rallied pushing yields lower. US corporate investment grade credit spreads, which measure the additional yield (risk premium) for taking on the credit risk of corporate bond issuers over lower-risk government bonds, declined 0.03% to 0.79%, from prior week highs of 0.82%. However, this spread tightening was not observed in all US corporate bonds, as high-yield (non-investment grade) software exposed bonds, threatened by AI disruption, declined markedly in value since the start of 2026. As a result, Bloomberg’s High Yield technology spread index increased from around 4.21% since the start of the year, to 4.88%–  largely driven by software loan concerns, which have also created negative crosswinds for the private credit sector.

The private credit industry has faced ongoing concerns related to lending standards, rising fund redemption requests, valuation transparency, and software loan exposure. JPMorgan, Bank of America (BoA), Citigroup, and Wells Fargo reported a combined total of over USD$100 billion tied to private credit lending portfolios. Instilling some private credit confidence, the “big four” US commercial banks highlighted their modest private credit exposure, limited losses, strong financial positioning, and ability to mark down eligible collateral in the event of credit deterioration. JPMorgan’s CEO, Jamie Dimon, affirmed that “you have to have very large losses in private credit before banks get hit”. Further reflecting confidence in the private credit asset manager’s outlook, prominent fixed income asset manager PIMCO purchased USD$400 million in private credit manager Blue Owl’s newly issued capital bonds. The Blue Owl bond, rated BBB- (the lowest tier of investment grade rating) is set to mature in 2028, and was priced to yield roughly 6.5%. Separately, Goldman Sach’s private credit vehicle sold USD$750 million in 5-year fixed rate bonds, also rated BBB-, and priced to yield around 6.42%. These bond proceeds were intended to repay a portion of outstanding indebtedness and fund general corporate purposes.

Outside of the private credit bond issuances by Blue Owl and Goldman Sachs, Wall Street banks returned to investment grade lending. Bank of America (BoA) looked to raise USD$10 billion (revised upwards from USD$8.5 billion) from a high-grade bond sale, with maturities ranging from 4 to 11 years–matching similar maturities sold by JPMorgan and Morgan Stanley last week. BoA's longest bond, maturing in 2037, was priced at a 1.18% premium above US treasuries. Collectively, Morgan Stanley, JPMorgan, and Goldman Sachs raised a combined USD$26.5 billion from bond sales through Wednesday (Bloomberg), marking the busiest week for US corporate investments in over a month.