By Morgan Stanley
The strong spending on AI continues to translate into a record issuance of corporate debt. June issuances reached USD 239bn, 90% more than a year ago… while the accumulated volume in 2026 has already reached USD 1.4tn, 36% higher than the previous year. Although the strong supply continues to find very solid demand… supported by record inflows of money into credit funds … MS Research considers that this balance is increasingly fragile and could eventually lead to a gradual widening of credit spreads. Moreover, this pressure is not limited to the Investment Grade segment… as they also observe a relative deterioration in some higher quality and long-term emerging market issuers … where they prefer to focus on opportunities within Latin American High Yield and certain names from CEEMEA.
MSR expects the major hyperscalers to continue reaffirming their plans for significant investment in AI after the earnings season… which would continue to drive a high issuance of Investment Grade corporate debt to finance that capex.
