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Investing.com - The five major technology hyperscalers have issued a record $121 billion in investment-grade debt year-to-date, significantly exceeding their five-year average of $28 billion, according to a new Bank of America report released Monday.
The massive debt issuance includes $81 billion in U.S. dollar investment-grade supply from Amazon, Alphabet, Meta, Microsoft, and Oracle since September, plus additional deals earlier in the year and the $27 billion RPLDCI transaction from October.
This surge in supply has substantially widened hyperscaler credit spreads, with Oracle experiencing a 48 basis point increase, Meta seeing a 15 basis point rise, and Alphabet facing a 10 basis point expansion between September 1 and November 14, representing 27-49% wider spreads that significantly underperform the overall investment-grade index.
Four of the five hyperscalers have issued U.S. investment-grade bonds since September, with Microsoft being the only exception, which Bank of America notes has "the least need for funding relative to their capex spending."
Bank of America projects similar issuance levels of approximately $100 billion in 2026, as these companies can continue covering most of their capital expenditures with operating cash flows, making their currently wider spreads potentially attractive to investors.
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