UBS Forecasts $360 Billion Tech Bond Sales, Cuts Leveraged Loans to $360 Billion
UBS raised its 2026 U.S. tech investment grade bond issuance forecast to $360 billion, lifting its overall U.S. IG debt outlook to $1.8 trillion and cut leveraged loan issuance to $360 billion from $450 billion. It projects hyperscaler capex of $770 billion (23% above prior) could drive up to $240 billion in extra public tech debt.
1. Revised 2026 Debt Issuance Forecasts
UBS lifted its forecast for 2026 U.S. tech investment grade bond sales to $360 billion from $300 billion and raised its overall U.S. investment grade debt outlook to $1.8 trillion from $1.725 trillion. The bank also cut its U.S. leveraged loan issuance estimate to $360 billion from $450 billion.
2. Tech Capex Drives Bond Supply
Several megacap technology companies including Meta, Amazon and Alphabet announced increased capital expenditure plans, prompting UBS to anticipate greater debt funding needs. Hyperscaler capex is expected to reach approximately $770 billion, about 23% above the bank’s prior projection.
3. Hyperscaler Public Debt Outlook
UBS projects hyperscaler public debt issuance could rise by an additional $40 billion to $50 billion, reaching as much as $240 billion in 2026. This reflects a trend of technology firms tapping global markets, exemplified by Alphabet’s recent Swiss franc and sterling bond deals.
4. AI Disruption and Leveraged Loans
UBS warns that AI-related disruption may widen spreads in leveraged loans and private credit, potentially reducing refinancing activity. As a result, the bank trimmed its leveraged loan forecast, anticipating that higher risk premiums will curb supply in the leveraged loan market.