AI hyperscalers will drive higher US corporate bond supply in 2026, analysts say

Core Viewpoint - U.S. corporate bond issuance is projected to significantly increase in 2026, primarily driven by the funding needs of AI hyperscaler companies [1][3]. Group 1: Corporate Bond Issuance Forecast - Overall U.S. corporate bond issuance is expected to reach $2.46 trillion in 2026, marking an 11.8% increase from $2.2 trillion in 2025 [3]. - Net issuance is forecasted to rise to $945 billion in 2026, a 30.2% increase from $726 billion in the previous year [3]. Group 2: AI Hyperscaler Impact - The five major AI hyperscalers—Amazon, Alphabet's Google, Meta, Microsoft, and Oracle—issued $121 billion in U.S. corporate bonds last year, compared to an average of $28 billion per year from 2020 to 2024 [4]. - BofA analysts predict that these hyperscalers will borrow approximately $140 billion annually over the next three years, potentially exceeding $300 billion annually [5]. Group 3: Market Dynamics - The increase in supply to fund AI initiatives could position the five hyperscalers among the largest issuers in the investment-grade bond market [6]. - Hyperscalers accounted for four of the five largest U.S. high-grade bond deals in 2025, with significant transactions occurring in the latter half of the year [6]. Group 4: Recent Bond Deals - Notable bond deals include Oracle's $18 billion issuance in September, Meta's $30 billion deal in October, Alphabet's $17.5 billion in November, and Amazon's $15 billion issuance [7]. - The surge in borrowing by hyperscalers has led to wider credit spreads, prompting investors to utilize credit default swaps (CDS) for hedging against potential risks [7][8].