Analysis-AI debt sales reshape global corporate bond markets

By Yoruk Bahceli

LONDON, June 1 (Reuters) - From Europe to Japan and Switzerland, immense enslaved issues by Big Tech companies are proving that smaller markets, often overshadowed by the U.S., tin punch supra their value successful the $40 trillion satellite of firm debt.

Google-parent Alphabet is already 1 of the biggest ‌outstanding borrowers successful the sterling and Swiss franc firm enslaved markets, portion Amazon raised 14.5 cardinal euros ($16.88 billion) successful March from an eight-part deal, the ‌largest ever successful the euro firm enslaved market, according to LSEG.

Debt issues by alleged "hyperscalers" - oregon Big Tech companies - extracurricular the United States are portion of a propulsion to diversify their backing aboriginal on, bankers said, arsenic ​they look to concern trillions of dollars of concern successful AI infrastructure, particularly information centers, successful the years ahead.

Raising indebtedness successful overseas currencies tin besides assistance the companies hedge the currency hazard from their planetary assets, portion taking vantage of comparatively little borrowing costs successful places similar Europe.

Alphabet smashed records crossed markets, with its yen, Canadian dollar, Swiss franc and sterling deals each mounting borrowing records successful those currencies.

"If you look astatine the gait of concern of these companies and if you accelerated guardant 12 months, immoderate of these companies are already ‌going to go among the biggest issuers globally successful immoderate ⁠currency," said Giulio Baratta, co-head of investment-grade concern astatine BNP Paribas.

In Europe, Alphabet and Amazon person helped propulsion up borrowing by non-financial U.S. firms to implicit 60 cardinal euros ($69.85 billion) this year, different record.

RECORD DEBT SALES

Morgan Stanley expects astir 50 cardinal euros of full borrowing ⁠from the hyperscalers successful euro indebtedness this year, which could assistance pb the U.S. to overtake France arsenic the euro zone's biggest root of wide firm debt.

"A batch of these markets, including euro, person evolved and present connection a batch much extent and accidental for larger superior raising than was historically the case," said John Servidea, planetary co-head of concern people concern astatine JPMorgan, which ​led ​recent deals for the 2 hyperscalers.

With the hyperscaler deals, internationally placed non-financial firm enslaved income tracked by ​LSEG person surged successful markets similar the Swiss franc and yen ‌this year.

The quality to rise important amounts of wealth successful specified markets has not gone unnoticed by U.S. companies beyond the hyperscalers, Servidea said.

"They're decidedly looking astatine different markets much earnestly than they would person previously."