Finimize - 🎤 The Shakira bond boom

What’s going on here?

Wall Street’s been at it again, selling bonds backed by chicken wings and music royalties like it’s 2007.

What does this mean?

Fast food revenues and royalties from artists like Shakira, Fleetwood Mac, and Bon Jovi might not scream “investment-grade” opportunities, but they’ve become the latest obsession. A craving for juicy returns has sparked the biggest boom in obscure financial products since the rowdy days that led to the global financial crisis. That’s got the pros bundling niche income streams – think fast-food franchise fees, song royalties, and oil well revenues – into bonds with higher yields than the boring, government-issued stuff. So while Wall Street’s dealmakers may be back to their creative best, let’s not pretend it’s out of idle curiosity: investor appetite has been driving this boom just as much as the bankers’ knack for, well, turning anything into a bond. And don’t bother Googling how to buy them: unless you’re a big-league investor, the vast majority won’t be available to you.

Why should I care?

For markets: Small fry, but big appetite.

At $380 billion this year, these deals are still more of a side dish than a main course and, thankfully, small enough not to threaten the whole financial system. Plus, they are catering to a genuine need: baby boomers looking for steady, attractive retirement income. But the obscure nature of the bonds means their risks aren’t always front and center. And the more outlandish and complicated they become, the faster they’ve been growing. In fact, the number sold is up 50% this year compared to last, showing that greed is firmly back on the menu.

The bigger picture: Risky rhythms.

Shakira’s hips don’t lie, and maybe markets don’t either. This boom shows that yield-hungry investors have been pushing boundaries – and perhaps common sense – to lock in returns. They’ve been piling in because risk seems low, but history loves to remind us that risk is actually often the highest when it feels the lowest.

What’s going on here?

A dry spell in Brazil has driven coffee prices to record highs, creating a serious buzzkill for anyone looking forward to a morning cup.

What does this mean?

Volcafe – one of the world’s biggest coffee traders – has slashed its forecasts for global arabica production because of Brazil’s intense weather. It now sees just 34 million bags of beans being churned out in the 2025-26 season – 11 million bags fewer than what was estimated just three months ago, and about 8.5 million bags short of demand. That’s left arabica coffee futures percolating to record highs in New York, up 80% so far this year. And it’s not just Brazil having weather trouble: drier conditions in Vietnam, followed by heavy rains during the robusta bean harvest, have put a damper on production there too.

Why should I care?

For markets: A brewing problem.

Just about every cup of coffee you drink is either arabica or robusta. And if you’re getting your caffeine fix from Starbucks and McDonald’s – as millions do – you’re sipping some 100% arabica beans. Your kitchen coffee likely isn’t too different: Nespresso pods tend to be at least 90% arabica, with a splash of the less-expensive robusta thrown in. But if these big brands start cutting costs by swapping your sweet, smooth arabica beans for something cheaper, you might end up with a more bitter cup.

The bigger picture: Strength in numbers.

Companies typically compensate for higher raw material costs by raising customer prices and trimming internal expenses. The goal, after all, is to keep profits intact. And the latter was likely the motivating factor when snacks and sweets giant Mondelez recently extended an offer to buy Pennsylvania-based chocolatier Hershey. The deal would flurry together favorite brands like Oreo and Reese’s, creating a sweet, cost-effective powerhouse.