Credit Lens Perspective of EUR Investor

Schroders' May 2026 report highlights that while credit fundamentals remain supportive, historically tight spreads offer little margin of safety. A major trend is the soaring bond issuance from technology hyperscalers which is beginning to reshape the market.

Key Takeaways

• 1.Credit spreads have retraced earlier widening and are back at exceptionally tight levels with minimal margin of safety.
• 2.Large-cap technology 'Hyperscaler' bond issuance is a dominant theme, reshaping bond markets with surging volumes.
• 3.Credit fundamentals remain supportive with leverage below 10-year averages, though stress is emerging via rising US High Yield default rates.

Table of Contents

• Summary
• Cross-credit analysis
• IG long vs short
• Corporate credit: valuation
• Corporate credit: fundamentals and technicals

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