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Debt from reputable companies is good for investors, says BondCliq's White on hyperscaler AI debt
11/6/2025, 10:45:57 PM
Economic Summary
- Global bond issuance is at record levels and approaching about $6 trillion for 2025, driving a substantial increase in supply and pushing yields/spreads wider.
- Widening spreads are largely a supply story rather than credit deterioration; many tech issuers still show strong balance sheets, so higher yields represent a buying opportunity for investors.
- Hyperscalers (e.g., META, GOOGL) are issuing debt primarily to finance AI infrastructure and related capex rather than buybacks, which lenders view positively given optimism around AI demand.
- The bond market has remained resilient despite macro noise (e.g., prolonged government shutdown); high‑yield deals are seeing strong demand and oversubscriptions, including a recent $3 billion crypto high‑yield deal placed by Morgan Stanley.
- Company‑specific issuance dynamics: Meta issued roughly 40% of its total outstanding debt in the past 90 days, while Google issued more than half recently but has limited near‑term maturities (roughly 5–7 years), providing some runway to manage liabilities.
Bullish
- Wider spreads create higher-yield opportunities for bond investors.
- Many issuers still have pristine balance sheets, making default risk low in near term.
- Debt is being used to fund AI infrastructure, which could drive long-term growth.
- Strong demand and oversubscriptions show robust appetite for corporate bonds.
Bearish
- Massive new supply from hyperscalers could keep pushing spreads wider and pressure prices.
- Meta has become a net debtor after aggressive issuance, raising refinancing and equity-volatility risks.
- If tech capex fails to pay off, companies may face higher future borrowing costs.
- Oversupplied markets could force issuers to pay more on subsequent debt offerings.
Bullish tickers
GOOGLMS
Bearish tickers
METAGOOGL
META
Bullish
Underlying business and cash flow remain strong; debt holders view default as unlikely and AI investments could support future growth.
Bearish
Meta has become a net debtor and issued ~40% of its outstanding debt in the last 90 days, creating refinancing and equity‑volatility concerns.
GOOGL
Bullish
Most maturities are 5–7 years out, giving time to manage liabilities; debt funds AI/infrastructure spending that could drive long‑term returns.
Bearish
Google issued a large share of its outstanding debt recently, increasing leverage in the near term.
MS
Bullish
Successfully placed and oversubscribed deals, benefiting from strong issuance activity and fee income.
Bearish
Underwriting exposure to high‑yield and syndicated markets could be pressured if credit sentiment deteriorates.
BONDCLICK
Bullish
CEO commentary highlights bond market resilience and substantial investor demand amid record issuance.
People mentioned
Chris WhiteKaren