JPMorgan Expects U.S. High-Grade Bond Supply to Reach $2.1 Trillion by 2027

JPMorgan expects that driven by spending from large tech companies on artificial intelligence (AI) infrastructure and refinancing needs, the issuance of U.S. investment-grade bonds will reach a historic high of $2.1 trillion by 2027, surpassing this year's expected record of $2 trillion. JPMorgan strategist Nathaniel Rosenbaum noted in a report that an annual issuance of $2 trillion or more may become the norm in the future. Next year, tech and media companies are expected to dominate net new issuance, with an estimated $612 billion in bonds issued, accounting for nearly 30% of the total investment-grade bond supply. Among these, hyperscale cloud service providers will issue $225 billion, with another $225 billion related to financing transactions for data centers and computing chips. Rosenbaum stated that supply will be concentrated on financing for AI infrastructure development, increasing sensitivity to the AI capital expenditure cycle. Although a 52% year-on-year drop in merger and acquisition bond supply is expected in 2026, stronger market sentiment may drive overall issuance above expectations. Additionally, the Democratic Party's victory in the midterm elections could lead to permitting and development issues in key states, delaying data center projects in 2028 and suppressing borrowing by tech companies. Furthermore, if hyperscale cloud service providers shift more bond issuance to foreign currencies, supply may also be affected.

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