Capex Funding Weighs on Technology Bonds

Huge capex requirements for AI and cloud infrastructure are driving record bond issuance in the technology sector, causing it to underperform other credit segments. UniCredit maintains an underweight stance on tech bonds due to this supply pressure.

Key Takeaways

• 1.Rising capex-related borrowing is putting technology credit under pressure, leading to sector underperformance compared to other investment-grade non-financials.
• 2.Investment-grade technology bond issuance has hit EUR 16bn YTD, primarily driven by US 'hyperscalers' issuing reverse Yankee bonds in Euro.
• 3.The four major tech companies (Amazon, Google, Meta, Microsoft) are forecast to invest USD 710bn in capex in 2026, reaching USD 1tn in 2027.

Table of Contents

• ISSUANCE IN THE TECHNOLOGY SECTOR CONTINUES TO RISE
• THE CONTEXT
• THE DATA
• OUR VIEW
• OTHER THINGS TO NOTE
• TODAY'S DATA RELEASES
• Author
• Editors
• Legal Notices

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