Tech companies are ramping up bond sales despite rising borrowing costs, defying the traditional negative correlation between yields and issuance. Hyperscalers like SpaceX and Broadcom are planning massive debt deals to fund AI infrastructure, with SpaceX reportedly in talks to raise $40 billion for Nvidia chips and Broadcom sketching a blockbuster financing for custom AI chips with OpenAI. US corporate bond sales hit $1.69 trillion this year, up 30% from 2023, while average yields rose 1.2 percentage points to 5.97%.
Analysts warn this "price-insensitive" supply could widen credit spreads further. Meanwhile, most other companies are slowing issuance: US investment-grade sales this week reached just $11.4 billion, well below the $25-30 billion expected, and European sales of €16.2 billion trailed pessimistic forecasts. With $1 trillion in hyperscaler capex projected for next year, AI-driven debt issuance shows no sign of slowing.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing