Nearly half of US data center bonds this year are junk-rated

The AI buildout has a financing problem, and it is showing up in the bond market. Nearly half of the bonds issued to fund US data centers this year carry junk ratings. The figures come from a Forbes analysis of FactSet data, with input from Columbia Business School professor Stijn Van Nieuwerburgh. Of the $80 billion in bonds issued for US data centers in 2026, approximately $37 billion is rated below BBB, the line where investment grade ends and junk begins. The numbers behind the boom The year-over-year jump is the striking part. In all of 2025, junk-rated data center bond issuance came to approximately $8.6 billion. This year’s approximately $37 billion is more than four times that total. The money is going into 16 projects tied to some of the biggest names in AI, including Amazon, Meta, and Nvidia. The bonds themselves, however, are not necessarily backed by those balance sheets. The junk ratings reflect the creditworthiness of the developers and structures doing the borrowing, which is a different thing from the tenants they hope to sign. Investors start asking for more By mid-October 2026, average yields on junk-rated data center bonds had climbed to nearly 10%, with the move...