USD Supply: Another Trillion For Corporates

(MENAFN- ING)

We forecast another hefty year for USD corporate issuance in 2027, with gross supply again expected to be around US$1tr. While below the record-like US$1.1tr seen in both 2020 and 2026, issuance is expected to remain exceptionally strong by historical standards.

Redemptions are expected to remain broadly unchanged at US$553bn, leaving net supply of around US$447bn. While this is a modest improvement from 2026, the USD market will continue to face a significantly heavier net supply burden than its EUR counterpart.

USD Corporate supply set to see another big year Source: ING, Dealogic

"> Hyperscalers and tech issuers are a driving force

As discussed above, the scale of investment required for data centres, energy infrastructure and digital capacity is unprecedented. The financing burden has spread well beyond technology firms themselves and is increasingly influencing broader capital markets.

Already in 2026, the hyperscalers have been a major source of debt issuance, raising around US$237bn across currencies, including US$160bn in USD and US$31bn in EUR. Issuance has been led by the usual suspects: Amazon, Alphabet, Meta, Oracle and IBM.

Looking ahead, we expect hyperscaler funding needs to increase further as investment in AI infrastructure, data centres and power capacity accelerates. As a result, we forecast total issuance of around US$280bn in 2027, including approximately US$190bn in USD and US$65bn in EUR (€60bn).

The rest of the technology sector will also remain very busy in 2027, with an expected US$200bn forecast to come to market.

M&A is substantial

M&A activity should continue to support primary market volumes. While technology has grabbed the headlines, M&A outside the sector has also accelerated, with both US and European deal activity reaching new highs in 2026. The pipeline remains healthy, suggesting momentum should carry into at least the first half of 2027.

However, higher rates, rising debt costs and somewhat tighter liquidity conditions are likely to become a greater constraint over time. As a result, we expect M&A-related issuance to remain supportive of supply, albeit at a more moderate pace as the year progresses.

M&A on the rise Source: ING

"> Higher rates, higher cost of debt

All-in yields in USD IG credit have risen back towards 5.2% (5yr), driven largely by higher underlying rates rather than wider credit spreads.

Looking ahead, our rates strategists expect a modest steepening bias in 2027, with slightly more downward momentum at the front end of the curve. The broader message, however, is that rates should remain elevated enough to keep all-in yields attractive.

We expect only limited changes in outright rates, curve shape and swap spreads, leaving all-in yields broadly intact. As a result, the search for yield should remain a powerful tailwind for credit markets throughout 2027, although the same elevated rates continue to increase the cost of debt for issuers.

Cost of debt has risen Source: ING, IHS Markit

"> Sectors supply shows the amount of tech issuance

Most sectors are expected to see relatively modest net supply in 2027. The clear exception is TMT, which will once again dominate issuance volumes. We forecast around US$180bn of supply from the hyperscalers alone, with a further US$850bn coming from the broader technology universe. Telecoms should add another US$60bn, leaving TMT firmly at the centre of the supply story.

Utilities remain another major source of issuance as rising capex requirements continue to drive funding needs, extending a trend that has defined the sector in recent years. Healthcare and Industrials should also remain active issuers, although a sizeable portion of gross supply will be offset by elevated redemption profiles.

In short, while net supply remains contained across much of the market, technology and utilities continue to shoulder the bulk of issuance growth in 2027.

Supply per sector (US$bn) Source: ING, Dealogic

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