Funding costs have surged as inflation fears have climbed globally. The average yield on a high-grade US corporate bond topped 6% this week for the first time since 2023, and risk premiums in the US climbed to their highest in six months.

Companies are feeling the impact. Paramount Skydance Corp. sold about $50 billion of buyout debt across markets this week, only to see much of it weaken within hours. Soup maker Campbell’s Co. and Bain Capital Credit LP’s private credit fund found lackluster demand for their bond sales this week. And a handful of corporations, including Brazil’s MBRF Global Foods Co. SA, chose to delay financings in high-yield markets.

The upshot is that the pace of issuance in the US for the rest of the year will probably slow down even more than investors had previously anticipated. High grade sales in the US year-to-date are up about 30%, but companies are expected to sell around $100 billion of investment-grade bonds in the US this month, down from $132 billion in the same month last year, and from nearly $195 billion in September.

“Between some of the messy new issuance performance, coupled with bonds that can’t find enough demand, bond sales will underwhelm heading into year end,” said Scott Kimball, chief investment officer at Loop Capital Asset Management. “That could spill over into 2027 very easily.”Companies that can wait, are doing so. Only four borrowers tapped the US high-grade bond market this week, as Paramount’s $30 billion offering took up most of the oxygen.

In addition to MBRF Global Foods’ delay, Multinational Mine Group, an Uzbek gold mining company, shelved a five-year note sale. Paramount had looked at borrowing months earlier, but was forced to wait as it faced litigation.

Waiting could have cost it around $500 million of annual interest expense by some estimates. Dennis Cinelli, Paramount’s chief financial officer, told Bloomberg that declines in the company’s debt in the first day of trading were “one-day choppiness in the market.”

He added: “We were in the market not for a one-day trade, but to execute a transformative transaction to create a next-generation entertainment and technology company.”The Paramount debt weakening could scare off companies planning to bring new debt deals as the high-grade market looks at transactions like these when deciding when to tap the market, said Annie Seelaus, chief executive officer at R. Seelaus & Co., a broker-dealer and asset management firm. Big bond deals funding acquisitions and artificial intelligence investment have been a key driver of overall issuance this year.

“It’s important that issuers, syndicate desks, they all take a moment and really assess what happened here,” Seelaus said, speaking on Bloomberg TV on Thursday.

“The market is clearly dependent on these jumbo transactions going well. It’s going to take a minute to digest exactly what this means and what it means going forward.”A key wildcard is where yields are headed. Fast selloffs in rates markets, like the one seen in the US in recent weeks, are typically followed by credit market weakness, according to a report from Barclays on Friday.

When the 10-year US Treasury yield rises by at least 40 basis points over a month, corporate bond spreads typically widen a bit later, according to the report from strategists including Harry Mateer and Dominique Toublan. That volatility is probably weighing on demand now more than spreads are, said David Del Vecchio, co-head of the US investment-grade corporate bonds at PGIM Fixed Income.

But in the long run, higher yields can boost demand, as the growing potential income from the securities draws in rate-sensitive investors like pension funds.

“Higher all-in-yields are ultimately supportive of demand, but many investors prefer to see a bit more stability in rates before deploying capital more aggressively,” he said. For now though, it’s harder for investors to buy, because it’s not clear how long yields will continue rising.

And that will probably filter down to companies’ borrowing plans, said Matt Brill, head of North American investment-grade credit at Invesco Ltd. “If you have to borrow, you’re going to have to pay up,” Brill said in a Bloomberg TV interview on Friday. “Those who can wait are going to try to wait.”

Paramount Skydance sold $52 billion of debt this week to help fund its acquisition of Warner Bros. Discovery Inc., in one of the biggest ever buyout financings. The company borrowed in the markets for US and European loans, US investment-grade bonds, and US and European junk bonds.

The debt broadly underperformed in the secondary market. The CDX Investment Grade index, a gauge of US credit risk, rose to its highest level since April.

Spreads on the riskiest junk bonds in the US, those rated in the CCC tier, crossed the 10 percentage point level for the first time since 2023.

A spread of 1000 basis points is often associated with distress. The US Securities and Exchange Commission pressed the financial industry to put more effort into valuing private assets, including private credit, as those holdings become harder to sell and investor redemption requests surge.

In a staff statement, the SEC didn’t offer new rules, but signaled it will be focused on how firms determine what their stakes are worth and how those values and risks are disclosed to investors. A few days later, Apollo Global Management said it’s beginning to roll out daily prices across its $850 billion credit business.

Broadcom Inc.’s Wall Street syndicate is starting to gather $60 billion of fresh AI chip financing to benefit Anthropic PBC and other companies. Banks involved in the massive debt package are poised to send out syndication letters for a $42 billion Class A senior-secured tranche.

The financing, which has been taking shape for weeks, is being closely watched by professionals across Wall Street and Silicon Valley for reassurance that investors are still keen to back AI’s buildout amid a public backlash against data-center construction. The European Union reached a preliminary agreement to cut capital charges on some securitizations by as much as half as it seeks to unlock billions of additional funding to finance goals including defense and climate resilience. Multilateral development banks are formally embracing complex credit structures such as synthetic risk transfers and collateralized debt obligations.

They’re looking to expand their lending capacity and move risk off their balance sheets at a time when governments are cutting support and climate change and war add to the need for aid. Apollo Global Management Inc. began to roll out daily prices across its $850 billion credit business on Thursday, an effort that coincides with renewed attention from the US Securities and Exchange Commission on the valuation of private assets.

Ares Management Corp. raised $4.2 billion — more than quadruple its initial target — for a debut secondaries fund that will provide capital to private managers. Multilateral development banks are formally embracing complex credit structures such as synthetic risk transfers and collateralized debt obligations to expand their lending capacity and move risk off their balance sheets.

The shift, outlined in a joint statement, comes as governments cut support for the development finance sector while climate change and war increase demand for aid, with MDBs collectively overseeing some $1.4 trillion in development assets last year. Nuveen offloaded a roughly $190 million position in bankrupt railroad owner Brightline’s senior uninsured municipal bonds at 45 cents on the dollar through a competitive bidding process, just days after backing the company’s bankruptcy filing.

Brightline’s Chapter 11 bankruptcy hinges on a plan that would crush hedge funds holding $1.1 billion of its riskiest bonds, while leaving much of its other debt largely intact.

China’s bad consumer debt cleanup is faltering as authorities scrutinize the debt collectors central to the effort. The country’s bank have been offloading bundles of defaulted consumer loans at steep discounts to firms that specialize in those assets, that often work with debt collectors to recoup funds.

named as its head of corporate and institutional banking for Europe and the Americas as part of the continuing overhaul at the British lender. Rekate, who was most recently global chairman of corporate banking at Citigroup Inc., will be based in London and will report to Michael Roberts.

who spent nearly three decades at , has joined as vice chairman, with the firm building an advisory platform focused on real assets across the Middle East and international markets. The firm will specialize in complex financing, special situations and private credit.