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

• Net issuance is forecast to rise 30.2% to $945 billion in 2026, with hyperscalers issuing $121 billion in 2025 compared to an average of just $28 billion annually from 2020-2024
• The Big Five hyperscalers are expected to match or exceed the Big Six banks' projected $157 billion annual issuance, making them among the largest issuers in the investment-grade index
• Increased hyperscaler borrowing has widened credit spreads and driven investors toward credit default swaps for hedging, with Oracle's five-year CDS costs more than tripling since its $12 billion September 2025 bond sale

Summary: AI Hyperscalers to Drive Record US Corporate Bond Issuance in 2026

U.S. corporate bond issuance is projected to surge substantially in 2026, primarily driven by AI hyperscaler companies' massive infrastructure investments. Barclays forecasts total issuance will reach $2.46 trillion in 2026, up 11.8% from $2.2 trillion in 2025, with net issuance climbing 30.2% to $945 billion from $726 billion.

Key Players: The five major AI hyperscalers—Amazon, Alphabet's Google, Meta, Microsoft, and Oracle—are expected to dominate borrowing activity. These companies issued $121 billion in corporate bonds in 2025, a dramatic increase from their $28 billion annual average between 2020-2024.

Future Outlook: BofA Securities projects the Big Five hyperscalers will borrow approximately $140 billion annually over the next three years, potentially exceeding $300 billion annually. This would rival the Big Six banks' expected $157 billion annual issuance, making hyperscalers among the largest issuers in the investment-grade index.

Notable 2025 Deals: Hyperscalers executed four of the five largest U.S. high-grade bond deals in 2025, including Oracle's September offering, Meta's record-breaking $16.5 billion non-M&A sale in October, and substantial deals from Amazon ($17.5 billion) and Microsoft ($15 billion) in November.

Market Implications: The borrowing surge has widened credit spreads and driven investors toward credit default swaps (CDS) for hedging. Oracle's five-year CDS costs have more than tripled since September. Oracle now faces shareholder litigation over alleged non-disclosure of its substantial debt needs for AI infrastructure development.

The primary driver remains AI-related capital expenditure requirements for data centers and processor expansion, overshadowing traditional factors like M&A activity and debt refinancing.