US investment grade (IG) credit issuance is expected to reach record highs this year, according to predictions by asset manager, Schroders.
Yet as borrowing grows, so too have hyperscaler credit spreads – now at a 10-year high against the market, Schroders says, more than 25bps above overall US IG spreads.
The firm anticipates gross IG supply to near US$2 trillion in 2026, topping previous records in 2020. In January, IG issuance has grown year-on-year and exceeded the 2014-2024 average by more than US$50 billion.
AI and M&A-related issuance has been a driving force in the year so far, a trend that Schroders expects to continue going forward. Between 2024 and 2025, big tech borrowing grew by more than US$90 billion. The firm predicts that this trend will “continue apace” in 2026.
In December 2025, BNY Mellon observed that hyperscalers had issued more than US$121 billion – and that US$90 billion of this was issued in the last quarter of the year. Oracle and Meta saw the largest credit spreads, it noted.
Demand for credit default swaps increased as a result, with BNY Mellon stating that the cost of such instruments rose from June 2025 as credit risk increased and investors became sensitive to capital expenditure plans.
“As issuance accelerates and the sector’s financing activities expand, we anticipate that the need to hedge exposure to AI-related investments and long-term technological liabilities will increase,” its report added.
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