Global credit markets appear well-positioned to absorb the surge of bond sales from the world’s largest technology companies, according to speakers at the Bloomberg Intelligence European credit outlook conference in London on Thursday. Despite concerns that massive AI-related capital spending will force companies like Meta, Alphabet, and Amazon to keep tapping debt markets heavily, panelists said the current wave of issuance remains far from destabilizing.

Tech Debt Boom Creates Only ‘Temporary Indigestion’

Iain Stealey, chief investment officer of international fixed income at JP Morgan Asset Management, said the rapid pace of mega-issuance had created “a shock and some temporary indigestion,” widening investment-grade spreads by roughly 10 basis points. But he dismissed broader fears of oversupply.

“Yes, there has been a lot of issuance, but these are enormous companies producing significant earnings every year,” Stealey noted. “It’s not yet at a point where we should be overly concerned. In fact, some of the concessions offered on recent deals make them compelling opportunities, especially given the very high quality of the issuers involved.”

Stealey added that supply is likely to normalize, pointing out that Meta has indicated it won’t return to the market until at least the second half of next year.

Tech Firms Still Among the Strongest Credits Globally

Mahesh Bhimalingam, global head of credit strategy at Bloomberg Intelligence, highlighted that major tech firms remain exceptionally strong from a credit-quality standpoint. Alphabet, he noted, carries a higher credit rating than France, while Apple and Microsoft would rank among the most elite sovereign-style issuers if they tapped Europe more often.

“So when they do come in, I think there’s going to be a massive bid,” he said, implying that investor appetite remains robust for top-tier corporate issuers even in heavy supply environments.

Favorable Outlook for 2026 Credit Performance

Panelists generally struck an upbeat tone about credit markets heading into 2026, noting that solid balance sheets, attractive carry, and slowing inflation provide a supportive backdrop for fixed-income returns.

Ashwin Palta, global high-yield portfolio manager at BNY Investments Newton, emphasized that higher-quality segments of the market currently offer better compensation for risk than lower-rated issuers.

“You’re being paid appropriately for that level of risk,” he said, adding that lower-quality names lack sufficient spread to justify moving down the credit curve.

Palta and other speakers flagged Additional Tier 1 (AT1), Restricted Tier 1 (RT1), and hybrid bonds as particularly attractive relative to BB-rated high yield. AT1 bonds have already been among 2025’s top performers, and panelists expect that strength to continue into 2026.

“We’re probably at peak asset quality, but we start from a relatively good position,” said Filippo Maria Alloatti, head of financials credit at Federated Hermes. “So I would expect more of the same.”