US IG Wrap — Fed cuts spring primary into action with more lined up for next week

William Hoffman

19 September 2025•4 min read

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It was a slow week for IG credit as most borrowers waited to see what the Federal Reserve would do on Wednesday.

Once word came down that the Fed would cut rates by 25bps, the flood gates reopened as 10 borrowers streamed into the primary to price $14.8bn on Thursday which accounted for nearly half of the week’s $30.8bn in supply.

AT&T was one of the largest borrowers on the week, pricing a $5bn four-part deal that included some much sought after long-dated paper, including 20 and 29-year paper that tightened by 30bps-32.5bps from initial price talk to 87.5bps and 100bps over Treasuries, respectively.

The telecom giant is expected to use proceeds in part to fund its $5.75bn acquisition of Lumen’s mass markets fiber business. The transaction is expected to close in the first half of 2026 and should help Lumen pay down its large and pricey debt stack, as 9fin has previously covered.

AT&T may also use a portion of the proceeds to repay some upcoming debt. The company has more than $3bn coming due by year-end across three currencies and another $10bn maturing in 2026, according to AT&T’s earnings as of 30 June.

Another $5bn five-part deal was issued by UBS following the Fed’s decision. It was the the Swiss bank’s largest US dollar deal since August 2022 as the bank looked to take advantage of spreads that tightened to lows not seen since the 90s.

Other tech names such as Meta, Oracle and Salesforce could be waiting in the wings to get deals funded in this strong market, as 9fin highlighted this week.

Treasuries did widen out slightly following the announced rate cuts, especially on the long end. But most investors see it as supportive for a busier primary in the coming weeks.

“Jerome Powell underscored the significant uncertainty around the paths of inflation and unemployment as well as the wide dispersion of views, which led to Treasuries widening,” one portfolio manager said. “Treasuries were only a little wider, and primary issuance resumed the next day with more to follow next week.”

Treasuries moved 5bps-6bps wider after the meeting to 4.11% on the 10-year and 4.72% on the 30-year but that did not undo the significant tightening in recent months in the lead up to the meeting. The ten-year has traded as high as 4.79% this year while the 30-year is down from highs of 5.05%.

With Treasuries and spreads both in but still at historically attractive all in yields, most feel these next weeks will be an attractive funding window to execute deals.

“The strength in more volatile asset classes will likely spill over into demand for credit, as the product still offers relatively compelling all-in yields despite the current tight credit spread environment,” said Blair Shwedo, head of public sales and trading at US Bank.

“Companies should be encouraged by current spread levels as well as the decline in Treasury yields we have seen in the past two months, creating a dynamic where we see good issuance and strong investor demand.”