Today's Bonds Pulse
US Treasury market steadies after Iran conflict sparks volatility
The US Treasury market has settled back to pre‑war calm following turbulence triggered by the Iran conflict, and expectations for bond‑market swings have fallen to near their lowest level of the year. Meanwhile, 30‑year Treasury yields slipped from a 19‑year high as optimism builds.
Refinancing Into Deterioration
The episode dissects Molson Coors' looming $2.4 billion refinancing challenge amid a sharp operational downturn, highlighted by an 11.9% drop in pretax income, a $3.6 billion goodwill impairment, and rising net leverage to 2.28x. Volume shrinkage—especially in the economy and flavored‑alcohol segments—combined with margin compression from higher commodity costs and an unfavorable product mix, erodes cash flow just as the company must return to the bond market in July 2026. CEO Rahul Goyal’s shift toward defending the economy portfolio and modest wins like Peroni and Fever Tree are framed as defensive triage rather than growth engines, while the math of free cash flow, dividend payouts, and share buybacks leaves little room for debt reduction. The discussion underscores the difficulty of refinancing with declining EBITDA and the risk of tighter spreads or covenant breaches.
Sleeping Giants
The administration is signaling a willingness to enlist government‑sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac in its effort to push mortgage rates lower. After the 2008 crisis, the GSEs’ mortgage holdings shrank dramatically, but policymakers see an...