AI borrowing lifts US investment-grade bond sales to $1.76 trillion record

The record pace of investment-grade bond sales comes as AI hardware spending reshapes corporate borrowing. By October 26, 2026, US investment-grade bond sales were on track to reach $1.76 trillion, surpassing the roughly $1.75 trillion borrowed during the 2020 pandemic boom. A week before the record, issuers led by megacap tech had already sold about $1.7 trillion of investment-grade bonds, about 29% ahead of the same point in 2025. This surge in supply can force issuers to offer higher yields to sell new debt, and older bonds lose value until their yields match. John Briggs, head of US rates strategy at Natixis North America, noted that if investors see their AI-linked bonds losing value, they will be less interested in buying new bonds. Falling Treasury yields have helped absorb the supply: the 10-year yield was 5% on October 26, down from 5.31% on October 5, which helped keep the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) stable at $104.02, up 0.15%. Meanwhile, new AI deals show lenders demanding higher rates. SpaceX signed a binding commitment for a roughly $40 billion equipment financing led by Apollo Global Management, with the most expensive piece possibly carrying a rate of up to 8.75%, above the 6.65% on its most expensive bonds from June. Bank of America, Citi, Morgan Stanley and Blackstone lined up $63 billion for a new vehicle to buy Broadcom gear and lease it to Anthropic starting in 2027, with Broadcom offering lenders “residual value support” and Moody’s warning that risk goes up if several deals like this happen close together. Meta Platforms plans to sell up to $95 billion of stock, including $12.5 billion of mandatory convertible preferred shares that convert on August 15, 2029, though stock sales don’t count toward the bond record. The Fed announces its rate decision on October 28, with the top of its target range at 4.00%; a cut would likely lift LQD’s price and lower its yield, while a hold that sends long-term yields higher would push its price down. Two price levels will show whether supply pressure is reaching the fund: if LQD closes below $101.20 before the SpaceX deal closes, the supply pressure has reached the fund; if LQD stays above $104.02 through year-end and the SpaceX pieces price below 8.3%, the supply pressure has likely eased.