#corporate-bonds

#corporate-bonds

Amazon recently issued $15 billion in debt, including a rare 40-year bond, and saw demand approach $80 billion - more than five times oversubscribed . Investors accepted yields only about 80 basis points above comparable U.S. Treasuries, effectively treating Amazon as quasi-sovereign credit despite the long maturity. This level of demand is extraordinary for a private company raising funds for aggressive capital expenditures.

Even as this trend has taken hold, the spread of the investment grade bond markets over treasuries, in aggregate, has gone from about 70 basis points to about 85 basis points today. I would anticipate that if the hyperscaler debt issuance theme continues, we could see spreads widen as much as 95 basis points, which is material when we're talking about a relatively low volatility market,