Hyperscaler bonds pressure US public debt
According to a Vontebel study, with their large debt issuances to finance AI development, big tech companies are competing for demand with US Treasury bonds. These companies are also turning to an underutilized segment of the curve: the long end.
Big tech companies, including Amazon, Alphabet, Meta, Microsoft, Oracle, and SpaceX, have issued over $180 billion in bonds this year, with estimates suggesting they could issue up to $250 billion more by the end of the year. These companies are competing with US Treasury bonds for investor demand, particularly in the long-end of the curve, with some issuing bonds with maturities as long as 100 years.
According to a Vontobel study, this trend is redefining the US Treasury bond curve and could lead to increased financing costs for the US government. The study suggests that the large-scale debt issuance by these companies is absorbing investor demand that would otherwise go to Treasury bonds.
Written by urgent.news from Expansion ES's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
Also reported by 1 other outlet
- The harsh European reality about US bonds expansion.com
