High Grade Basic Materials Weekly

Research evidence excerpt

High Grade Basic Materials Weekly

Accessible version

Week ended June 12, 2026

Industry Overview

HG Basic Materials spreads finished 2 bps wider w-o-w 12 June 2026

HG Basic Materials spreads finished 2 bps wider w-o-w, performing roughly in-line with High Grade Credit

the Corp Index (+1 bp w-o-w, OAS basis). All subsectors performed roughly in line North America

outside of Metals (4 bps) which slightly underperformed. In Chemicals, we highlight Basic Materials

DOW inc (DOW), which outperformed and tightened 8 bps across the curve following its

raised 2Q26 guidance and stated intention to allocate cash toward deleveraging at an

industry conference earlier this week (more below).

HG Basic Materials underperformed the Corp Index

HG Basic Materials (+14 bps of excess returns) underperformed the Corp Index (-8 bps)

w-o-w. Chemicals (+0 bps) and Construction / Building Materials (-3 bps) both Daniel Lungo Research Analyst

outperformed other basics subsectors, while Paper & Packaging (-14 bps) and Metals (- BofAS

29bps) underperformed. daniel.e.lungo@bofa.com

Peter Merlini

1Q26 Quarterly: Iran impacts diverge for chems ResearchBofAS Analyst

We affirm our more neutral view on IG Basic Materials, given our largely stabilized peter.merlini@bofa.com

outlook on chemicals and metals. In chems, we see diverging implications amongst GavinResearchAndersenAnalyst

subsectors within the Chemicals space as the duration of the US-Iran conflict and BofAS

gavin.andersen@bofa.com

consequently the closure of the Strait of Hormuz (SoH), extends. Namely, we continue to

believe (i) commodity chemical names will continue to benefit as flows out of the SoH

remain disrupted, while (ii) downstream or specialty names will broadly experience more

Exhibit 1: WTD Excess Returns (bps)