Investors are clamoring for longer-term corporate bonds, but companies are reluctant to issue them due to higher borrowing costs. When Aon Inc. sold $2 billion of 30-year notes, orders reached $10 billion. GSK Plc saw demand about ten times its $500 million 30-year offering. Average orders for high-grade US corporate bonds equal roughly four times supply in 2026. Surging global yields, driven by inflation fears and central bank rate hikes, make long-dated debt expensive for issuers. The 30-year Treasury yield hit a post-crisis high of ~5.37%. The Fed signaled another hike this year, and the ECB lifted rates for the second time since the Iran war began.

Just 5% of US investment-grade bonds sold in early September mature in 30+ years — about $108.3 billion — the smallest share since at least 2020. Average maturities have fallen from a 12.4-year peak to 10.3 years. Alphabet Inc. and Amazon.com Inc. have flooded the market with long-dated debt, crowding out other issuers. Insurers and pension funds face a supply void for matching annuity and retirement liabilities. Private placement tenors have also shrunk to ~8.9 years from 13.2 years in 2021. European borrowers are similarly shortening tenors.