Payden & Rygel: IG issuance as a share of US nonfinancial corporate debt

Payden & Rygel: IG issuance as a share of US nonfinancial corporate debt

February 16, 2026

Fixed Income

The corporate bond market saw a recent surge in new-issue supply, mainly from large hyperscalers, raising concerns that 'the largest wave of corporate bond supply in history' could disrupt credit markets and push spreads wider. But we think there's more nuance to the story.

First, while estimates of $1.8 trillion in new gross issuance in 2026 represent the largest annual issuance, it's important to consider issuance relative to the size of the bond market. When the economy grows, the debt market grows as well, so issuance should naturally increase. Turns out the $1.8 trillion in estimated issuance represents only 12% of total corporate debt outstanding, on par with the annual issuance share of outstanding debt from 2012 to 2017.

Second, we are less concerned about a higher proportion (14%) of tech-related debt. After all, the tech sector has been the largest single driver of U.S. private demand growth and stock market outperformance in recent years.

Third, investor appetite should remain strong with hyperscalers' balance sheets still healthy. Further, credit spreads should remain narrow as long as the U.S. economy continues to grow in 2026.

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