Investment grade bank bonds are issued by U.S. and foreign banks and their holding companies rated BBB‑/Baa3 or higher. Banks are among the largest issuers in the investment grade market, and regulation shapes how much debt they issue and where in the corporate structure they issue it.
For investment grade net lease investors, banks are a major tenant group: branch leases with JPMorgan Chase, Bank of America, Wells Fargo, PNC, and others trade every week. Branch leases are usually signed by the bank subsidiary, whose rating can differ from the holding company that issues most bonds. See the JPMorgan Chase bonds vs. NNN analysis and the investment grade bonds hub.
Bank Bond Yields Today
Most bank issuers are rated in the A and BBB categories. As of October 1, 2026, the ICE BofA US Corporate index yields by rating category were AA 5.80%, A 5.84%, and BBB 6.19%, and the BB high yield index yielded 7.03%. Individual bonds trade above or below their category depending on maturity and the issuer’s credit. The table updates each business day.
| Index (rating category) | Effective yield | Option-adjusted spread | Spread range since history start |
|---|---|---|---|
| AA | 5.80% | 61 bps | 41 to 73 bps (low Aug 18, 2025; high Apr 7, 2025) |
| A | 5.84% | 73 bps | 59 to 115 bps (low Jan 22, 2026; high Oct 20, 2023) |
| BBB | 6.19% | 106 bps | 92 to 163 bps (low May 29, 2026; high Oct 20, 2023) |
| Investment grade composite | 5.99% | 86 bps | 73 to 133 bps (low Jan 22, 2026; high Oct 20, 2023) |
| BB | 7.03% | 204 bps | 150 to 311 bps (low Aug 28, 2026; high Oct 20, 2023) |
ICE BofA US Corporate (AAA to BBB) and US High Yield (BB to CCC) index effective yields and option-adjusted spreads, from the Federal Reserve Bank of St. Louis (FRED), as of October 1, 2026. The range covers the daily history FRED currently publishes for these series, which begins October 3, 2023. Updated each business day.
What Drives Bank Credit
Holding company versus bank. U.S. banks are usually owned by a holding company that issues most of the group’s long-term bonds. Holding company bonds rank behind the bank’s depositors and other creditors, so they are typically rated a notch or two below the bank. The largest banks must also hold minimum amounts of loss-absorbing long-term debt at the holding company.
Deposits, capital, and loss absorption. Regulatory capital absorbs losses first. FDIC insurance protects covered deposits, generally up to $250,000 per depositor, per bank, per ownership category; it does not protect bondholders. Federal Reserve discount window loans provide secured liquidity, not loss absorption. In the 2023 failures of Silicon Valley Bank, Signature Bank, and First Republic, unsecured creditors of failed banks and their parents were exposed to losses; SVB Financial Group, the holding company, filed for Chapter 11.
Capital rules. U.S. banking agencies re-proposed the Basel III endgame capital rules in 2026. Final requirements and effective dates depend on the rule the agencies adopt; check the agencies’ sites for current status.
Regulatory actions. Enforcement actions can limit growth. The Federal Reserve lifted Wells Fargo’s asset cap on June 3, 2025 and terminated the 2018 enforcement action on March 5, 2026.
Acquisitions. Capital One completed its acquisition of Discover Financial Services in May 2025, adding a card network and deposits. Large bank deals require regulatory approval and change the combined company’s funding and capital profile.
Bank Issuers That Are Also NNN Tenants
These banks lease branches that trade as net lease investments. Ratings shown are for the entity in our database, which may be the holding company or the bank; the entity is named where it differs from the brand. Toronto-Dominion Bank, the Canadian parent, is distinct from TD Bank, N.A., its U.S. bank subsidiary. Ratings come from our ratings database and update automatically; n/a means no verified rating is on file. A corporate rating applies to a lease only if the rated entity signs or guarantees it.
| Issuer (rated entity) | S&P | Moody’s | Index yield for rating category | NNN median asking cap (listings) |
|---|---|---|---|---|
| JPMorgan Chase | AA- | Aa2 | 5.80% (AA) | 5.00% (34) |
| Bank of America | A+ | Aa2 | 5.84% (A) | 5.50% (22) |
| Wells Fargo | A+ | Aa2 | 5.84% (A) | 5.14% (6) |
| Citibank | A+ | Aa3 | 5.84% (A) | fewer than 5 listings |
| U.S. Bank (U.S. Bancorp) | A | A3 | 5.84% (A) | 5.47% (6) |
| PNC Bank | A | A2 | 5.84% (A) | 5.10% (19) |
| Truist | A | A3 | 5.84% (A) | 6.25% (7) |
| TD Bank (The Toronto-Dominion Bank) | A+ | Aa1 | 5.84% (A) | 5.00% (5) |
| Capital One | BBB+ | A3 | 6.19% (BBB) | fewer than 5 listings |
| Fifth Third Bank | A- | A3 | 5.84% (A) | 4.63% (16) |
| Huntington Bank | A- | A3 | 5.84% (A) | fewer than 5 listings |
| Regions Bank | A- | Baa1 | 5.84% (A) | fewer than 5 listings |
| Citizens Bank | A- | A3 | 5.84% (A) | fewer than 5 listings |
| KeyBank | BBB+ | n/a | 6.19% (BBB) | 6.30% (5) |
| M&T Bank (M&T Bank Corporation) | BBB+ | Baa1 | 6.19% (BBB) | fewer than 5 listings |
| BMO Bank (Bank of Montreal) | A+ | Aa2 | 5.84% (A) | 6.86% (6) |
| Comerica Bank (Fifth Third Bank, N.A.) | A- | A3 | 5.84% (A) | fewer than 5 listings |
Ratings from our ratings database (S&P Global Ratings and Moody’s rating actions and issuer filings); n/a means no verified rating is on file. Index yield is the ICE BofA effective yield for the issuer’s rating category via FRED, as of October 1, 2026, not a quote on the issuer’s own bonds. NNN median is the median asking cap rate on active listings InvestmentGrade.com tracks, as of October 9, 2026. Shaded rows are not investment grade or not rated.
Bond Index Yield vs. NNN Cap Rate
For banks with enough active branch listings, the table compares the bond index yield for the bank’s rating category with the median asking cap rate on its listings. Many branch listings are ground leases.
| Tenant | S&P / Moody’s | Index yield (category) | Median asking cap rate (listings with a cap rate) | Spread |
|---|---|---|---|---|
| JPMorgan Chase Bonds vs. NNN analysis | AA- / Aa2 | 5.80% (AA) | 5.00% (34) | −80 bps |
| Truist | A / A3 | 5.84% (A) | 6.25% (7) | +41 bps |
| Bank of America | A+ / Aa2 | 5.84% (A) | 5.50% (22) | −34 bps |
| U.S. Bank (rated entity: U.S. Bancorp) | A / A3 | 5.84% (A) | 5.47% (6) | −38 bps |
| Wells Fargo | A+ / Aa2 | 5.84% (A) | 5.14% (6) | −71 bps |
| PNC Bank | A / A2 | 5.84% (A) | 5.10% (19) | −74 bps |
| TD Bank (rated entity: The Toronto-Dominion Bank) | A+ / Aa1 | 5.84% (A) | 5.00% (5) | −84 bps |
| Fifth Third Bank | A- / A3 | 5.84% (A) | 4.63% (16) | −122 bps |
| KeyBank | BBB+ / n/a | 6.19% (BBB) | 6.30% (5) | +11 bps |
Showing 9 tenants. Index yield is the ICE BofA effective yield index for the tenant’s rating category (US Corporate AAA, AA, A or BBB index; US High Yield BB, single-B or CCC and lower index), using the S&P rating, or the Moody’s equivalent where S&P does not rate, from the Federal Reserve Bank of St. Louis (FRED), as of October 1, 2026. It is an index average, not a quote on the company’s own bonds. Median asking cap rate is the median of asking cap rates (stated, or computed from stated income and price when no rate is stated) on active listings InvestmentGrade.com tracks, listings last observed October 5, 2026; asking cap rates are not closed-sale cap rates. Spread is the median asking cap rate minus the index yield. Ratings are the agency ratings in our ratings database for the entity shown; the rating type (for example issuer, senior unsecured debt, long-term debt or revenue bond ratings) varies by company. The entity that signs or guarantees a given lease can differ, so confirm the lease obligor. Shaded rows are below investment grade. NR means the agency does not rate the entity; n/a means no verified rating is on file. Not shown because fewer than 5 active listings with a published cap rate were observed: Citizens Bank.
The full tenant-by-tenant comparison is in the bond-to-NNN spread table.
Other Major Bank Bond Issuers
Other large bank and financial bond issuers that rarely appear as net lease tenants. This roster does not show ratings, which change; confirm the current rating with S&P, Moody’s, or Fitch or the issuer’s investor relations site.
| Subsector | Issuers (ticker) |
|---|---|
| Investment banks and custody | Goldman Sachs (GS); Morgan Stanley (MS); BNY (BK); State Street (STT); Charles Schwab (SCHW) |
| Card and consumer finance | American Express (AXP) |
| Foreign banks issuing U.S. dollar bonds | Royal Bank of Canada (RY); HSBC Holdings (HSBC); Barclays (BCS); Mitsubishi UFJ Financial Group (MUFG) |
Bank Bond Risks
- Funding and deposit flight. Rapid deposit outflows can force asset sales at losses, as in 2023.
- Credit losses. Commercial real estate, consumer, and corporate loan losses reduce capital.
- Interest rate risk. Securities bought at low yields lose value when rates rise.
- Structural subordination. Holding company bondholders rank behind the bank’s depositors and creditors.
- Regulatory change. Capital and liquidity rules affect how much debt banks issue and how it is rated.
Frequently Asked Questions
What are investment grade bank bonds?
Bonds rated BBB‑/Baa3 or higher issued by banks and bank holding companies, including senior unsecured, subordinated, and other loss-absorbing debt.
Does FDIC insurance protect bank bondholders?
No. FDIC insurance covers deposits, generally up to $250,000 per depositor, per bank, per ownership category. Bondholders, especially at the holding company, can lose money if a bank fails.
Why do bank holding company bonds have lower ratings than the bank?
The holding company’s main asset is its ownership of the bank, so its creditors are paid only after the bank’s depositors and creditors. Agencies usually rate holding company senior debt one or two notches below the bank.
What is the bond-to-NNN spread for bank branches?
It varies by bank. Today the median asking cap rate on JPMorgan Chase branch listings is 5.00% against an AA index yield of 5.80%, a spread of −80 bps. Many branch listings are ground leases, which ask lower cap rates and leave the landlord no building to depreciate.
Own or Buying Bank Net Lease Property?
If you own a bank branch with maturing debt or are weighing a sale, we can review refinance and sale options and find buyers among private investors, family offices, and 1031 exchange buyers.
On the majority of NNN transactions, the listing broker pays a cooperating commission, so there is typically no separate fee to you as the buyer for professional representation.
Find it: on market and off market net lease properties, sourced and underwritten for your criteria.
Fund it: acquisition, refinance, and recapitalization financing through our lender relationships.
Exit it: a buyer pool that includes institutions, family offices, and 1031 exchange buyers.
Exchange it: 1031 exchanges into or out of net lease property, run against the deadlines.
Other Sector Deep Dives
- Investment Grade Healthcare Bonds
- Investment Grade Consumer Discretionary Bonds
- Investment Grade Consumer Staples Bonds
- Investment Grade Utility Bonds
- Investment Grade Telecom Bonds
- Investment Grade Energy Bonds
- Investment Grade Industrial Bonds
- Investment Grade REIT Bonds
- Investment Grade Bonds Hub
Educational content only. InvestmentGrade.com is a commercial real estate brokerage and educational publisher. We do not sell, broker, underwrite, or solicit any bonds, securities, or investment products. Yields, ratings, and prices referenced fluctuate continuously and are sourced from public market data as of the date noted. Nothing on this page constitutes investment advice, an offer to sell, or a solicitation to buy any security. Consult a licensed broker-dealer, registered investment advisor, or tax professional before making any investment decision. For SEC investor education, visit investor.gov.
