Big Beautiful Bonds: why big tech’s borrowing boom is reshaping credit markets Big Beautiful Bonds: why big tech’s borrowing boom is reshaping credit markets

Markets rarely move on hope alone. When uncertainty rises, they tend to price risk first, often before outcomes are clear. The renewed tensions in the Middle East are a reminder of that dynamic, bringing energy risk, inflation concerns and policy credibility back into focus.

My Bloomberg monitor and my TV are telling me different stories. Headlines are dominated by conflict, energy shocks, and warnings about inflation and supply chains. Yet my Bloomberg screen suggests a very different picture: equities are at record highs and credit spreads are tight.

Let’s start with a simple explanation of what a hybrid is: a perpetual bond that combines features of both debt and equity. Hybrids are subordinated to senior bonds but rank ahead of equity and possess equity-like features, such as loss-absorption and the ability to defer coupons. The corporate hybrid market has kicked off 2026 with a bang. Year‑to‑date gross issuance has already surpassed €31bn, well ahead of prior run‑rates (full‑year 2025 ended at €42bn).

As the world grapples with how AI will shape and change our lives going forward from the mundane, like automated homes or more clever apps, to more existential threats (opportunities?) leading to job and possibly sector obsolescence and related, broader social implications, it’s definitely well accepted that the demand for AI computing power is enormous and growing. Estimates vary, but they are all astronomical, ranging from $5 trillion to $7 trillion in capital investment needed to fund the global data centre and AI buildout, including…

Since Keith So joined us earlier this year as a quantitative analyst, I’ve been throwing all manner of questions at him and his python notebooks. The most recent was; “Is there an optimum place to invest on the yield curve to maximise the benefits of rolldown?”