Hyperscalers exceed full-year debt forecasts as AI bond concessions rise

The latest report from ZeroHedge indicates that major AI hyperscalers, including Alphabet, Amazon, Meta, Microsoft, and Oracle, have surpassed their full-year debt forecasts, issuing $296 billion in bonds in 2026. This figure exceeds Goldman Sachs’s projection of $250 billion for the entire year. The increased issuance has led to wider bond concessions, with the median concession rising from 2.25 basis points in 2025 to 12 basis points in 2026. This development reflects a growing reliance on corporate credit markets to finance data centers and AI infrastructure, amid the pressures of a rapidly increasing supply of investment-grade bonds. In the context of prediction markets, the news has implications for the 5-year Treasury yield, particularly concerning expectations of rate cuts. The market for whether the yield will dip below 4.10% before 2027 is currently priced with significant uncertainty, with recent movements suggesting a growing perception of economic weakness. The largest sub-market has shown a shift, with YES pricing at 54%, up from 47% a week ago. This shift reflects market participants’ interpretation of the bond market dynamics as potentially indicative of broader econ...