AI spending to drive US bond issuance to record $1.8t: JP Morgan

JP Morgan Chase expects US investment-grade bond issuance to reach a record US$1.8 trillion in 2026, driven by increased spending on AI, refinancing, and mergers and acquisitions.

This forecast surpasses the previous peak set in 2020.

The technology, media, and telecommunications sector is projected to borrow about US$400 billion, with technology firms alone expected to issue US$250 billion in bonds, up 61% from 2025.

Consumer sector issuance may rise 44% to US$140 billion, media and entertainment 38% to US$85 billion, and telecom 25% to US$56 billion.

JP Morgan predicts US banks will see a 6% drop in bond issuance due to reduced supply needs after leverage ratio reforms.

Bond maturities are estimated to remain above US$1 trillion in 2026.

Net issuance is forecast to rise 54% to US$800 billion, the highest since 2020.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

AI spend meets credit strain

JPMorgan pegs IG issuance at a record US$1.8 trillion, with tech near US$250 billion, yet the market must absorb US$800 billion in net supply without widening spreads from near records 1.
Spreads sit near records in US investment‑grade (IG) and post‑GFC tights in European investment‑grade (Euro IG), helped by supply‑demand balance with big inflows, which leaves valuations sensitive if supply swamps demand 1.
AI capex is unprecedented in scale, supporters expect productivity gains with a multiplier effect, while investors scrutinize fundamentals 1.
US$800 billion of net supply in 2026 would be the largest since 2020 yet the backdrop could bring tighter policy if inflation re‑accelerates, tilting risk toward wider spreads 2.

Preparing for 2026 maturity wall

Mapping the sector’s US$250 billion calendar helps credit teams set up early for new‑issue concessions (extra yield offered on new bonds), since heavy supply pressures primary pricing when spreads look tight.
Underwriters (banks that structure and sell bonds) can use a 61% surge in tech issuance to build origination pipelines (deal flow), deepen work around AI capex financing on a multi‑year path.
Credit funds focused on security selection can use intra‑sector dispersion to back stronger names and sidestep weaker ones across AI supply chains, similar to tariff impacts that split results in sectors 1.
Portfolio managers can tilt toward short‑duration, high‑quality tech to boost carry while curbing duration risk from Federal Reserve (Fed) moves, given a US$400 billion technology, media, and telecommunications (TMT) issuance cluster 3.