The $52bn bond issuance by Paramount Skydance, to fund its purchase of Warner Bros Discovery, is just one of the several massive deals which have taken place this year. What does this mean for asset owners? (Mario Tama/Getty)
Good morning. It’s been a busy year for the bond market in more ways than one.
One of those ways has been the increasing frequency of massive bond transactions.
Between the start of 2025 and the end of August 2026 there were 14 non-financial corporate bond deals of $20bn or more - and not all of these were related to AI:
Amazon and Meta issued two deals that exceeded £20bn, while Alphabet, Google’s parent company, issued three. The pace is clearly accelerating as half of these transactions were in 2026, and five were between June and August. In October Paramount Skydance issued $52bn in debt to finance its acquisition of Warner Bros.
Is this going to continue and what does this mean?
Well, Frank Valle, associate director of fixed income at Marquette Associates, says that as long as investors such as asset owners continue to absorb these large transactions then companies seem happy to “supersize” their new issuances until that appetite meaningfully changes.
He predicts heavy issuance from large tech companies is likely to continue through the rest of the year, with less than 40 per cent of expected 2026 issuance having happened by the end of June.
Valle says: “Price clears all markets. Managers are being selective in the AI-related deals that they are participating in, and orderbooks are falling through the year as there have been more and more issuance.
“Managers are holding a lot of dry powder because they know there will be additional opportunities to add AI-related names later in the year. While index level corporate bond spreads are flatish year-to-date, the technology sector is wider.
“As the market gets cheap enough and there is more clarity on future issuance, there should be more demand for the bonds.”
So essentially oversupply will lead investors to become selective and sit on their cash, meaning that when bonds come to market they do so with higher yields to clear the trade and draw investors back in. The circle of life.
Has any of the recent volatility changed his assessment?
Valle says: “Real rates have been pushing higher, which has pushed nominal rates up as well. Eventually there will be a point where the market pulls back, but I don’t think it is there yet.
“Spreads are wider today but hyperscalers still need a lot of funding to support capital expenditure. If it is in the issuers’ best interest to issue, they will.”
Some parts of the market are certainly showing strain. For example, just hours after Paramount’s issuance the prices of the company’s bonds started falling.
But in the meantime it means asset owners have plenty of volume to choose from, albeit selectively.
