Investment-Grade Bond Market Expects Up to $250 Billion September Issuance
JPMorgan Asset Management predicts a surge in corporate bond issuance for September driven by massive corporate spending on artificial intelligence infrastructure.
The investment-grade bond market is preparing for a high volume of issuance in September, with estimates ranging from $175 billion to $250 billion. This borrowing surge is primarily driven by corporate investments in artificial intelligence, with companies borrowing more than $410 billion this year to fund data centers and AI buildouts.
Kelsey Berro of JPMorgan Asset Management notes that while supply has reached record levels, demand for corporate debt remains equally strong. Retail demand for investment-grade bonds in 2024 has already exceeded the full-year totals of any year since 2010. August issuance reached $157 billion, supported by significant offerings from Alphabet Inc., AbbVie Inc., and Advanced Micro Devices Inc.
Despite a $75 billion gap in September forecasts that complicates portfolio positioning, Berro suggests that market anxiety may be overblown. She indicates that if stability persists through the coming month, it could trigger a rush of sidelined investors back into the market.
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