Big Tech borrowing drives US corporate bond sales to annual record, data shows
US corporate bond issuance hit a record $1.88 trillion in 2026, driven by Big Tech borrowing for AI ambitions. Hyperscalers accounted for a fifth of issuance. Concerns over AI monetisation and higher interest rates persist, with default insurance costs rising for major spenders.
US investment-grade corporate bond issuance climbed to US$1.88 trillion (HK$14.66 trillion) this year, LSEG data showed, surpassing the previous annual record as Big Tech companies borrow heavily to fund their AI ambitions.
The 18.7 per cent rise in debt issuance from a year ago until 4 November breached the previous record of US$1.86 trillion raised in 2020 when companies stockpiled cash during the COVID-19 pandemic, driven by near-zero interest rates. However, this year the number of issuances fell about 4 per cent to 1,084, implying that the average offering size swelled to roughly US$1.7 billion from about US$1.4 billion a year ago, thanks to a few jumbo transactions by the largest borrowers.
Hyperscalers Amazon.com and Alphabet top the list of companies that raised the most money by selling bonds this year, the data showed. Combined with other hyperscalers such as Meta Platforms, Microsoft and Oracle, it totalled over US$370.7 billion, or roughly a fifth of all US investment-grade issuance so far this year, LSEG data showed.
“The market has absorbed the AI issuance and it is evident from the oversubscribed nature of the deals,” said Victoria Fernandez, chief market strategist and fixed income portfolio manager at Crossmark Global Investments. “The AI companies do not seem to be slowing down in coming to both the USD and Euro bond markets.”
Apple became the latest tech giant to tap the bond market this week. A term sheet seen by Reuters showed the iPhone maker is raising about US$7.5 billion from a seven-part US-dollar bond offering. However, the prospect of higher interest rates is adding to concerns about how quickly massive AI investment will translate into profits and whether heavily indebted companies can generate returns fast enough to service mounting interest costs.
Default insurance costs at some of the biggest AI spenders have surged in recent months. Oracle's five-year spread hit a record 325.45 basis points last month. Amazon, Alphabet, Nvidia and Meta also set records, though well below Oracle's level. The Democratic sweep in US midterm elections has also sparked concerns about tougher AI regulation and a slowdown in the data-centre buildout.
Goldman Sachs analysts flagged delayed AI monetisation and growth in purchase commitments as key risks to more debt issuance, according to a note published on Friday. The bank expects 35 per cent of hyperscalers' capital expenditure to be funded through bond issuance in 2027, roughly in line with the levels seen this year.