BNP Paribas Predicts End of Corporate Bond Bull Market
BNP Paribas SA warns that AI-driven debt issuance from tech giants could oversupply credit markets and widen investment-grade spreads by 2026.
Analysts at BNP Paribas SA predict the end of the corporate bond bull market as technology companies increase debt issuance to fund artificial intelligence and data center investments. The bank estimates that hyperscalers, including Amazon.com Inc., Alphabet Inc., and Microsoft Corp., may sell approximately $400 billion in bonds next year.
BNP Paribas forecasts that total net fixed income supply will reach a record $3.7 trillion next year. This surge in corporate debt coincides with a rise in government bonds, creating a market shift from scarcity to abundance. The bank expects this oversupply to widen investment-grade spreads by the end of 2026.
JPMorgan Chase & Co. suggests that these bond sales can still be placed, though the firm notes that the sheer volume is testing investor price tolerance.
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