Goldman Sachs Says Surge in US Junk-Bond Supply Is Straining Investor Demand
JH Kim
Summary
- A surge in U.S. high-yield corporate bond issuance is outpacing investor demand, according to the analysis.
- Junk-bond spreads and CCC-rated bond spreads have widened to recent highs, adding pressure to investors' ability to absorb supply.
- Goldman Sachs said issuance of AI-related bonds totaled about $600 billion this year and could accelerate again in 2027.
Forecast Trend Report by Period
U.S. high-yield corporate bond issuance has surged, adding to signs that investor demand is failing to keep pace with supply. Junk-bond spreads have widened to their highest level since April.
Walter Bloomberg reported on September 28 that U.S. high-yield corporate bond issuance reached $38.5 billion in September.
Spreads on lower-rated CCC bonds have climbed to their highest level since 2023. The increase indicates that heavier corporate bond supply is straining investors' ability to absorb new deals.
Goldman Sachs said issuance of artificial intelligence-related bonds totaled about $600 billion this year. The bank also said AI-related bond sales could accelerate again in 2027.
JH Kim
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