US companies are borrowing at the fastest rate since the Covid-19 pandemic, with US corporate bond sales in early January reaching levels not seen in nearly five years as firms rush to finance artificial intelligence infrastructure and a wave of anticipated mergers.
Record-Breaking Start to 2026
Corporate borrowers raised more than $95 billion through 55 investment-grade bond deals during the first full week of January, marking the highest weekly volume since May 2020 and the busiest start to any year on record, according to LSEG data.
Morgan Stanley forecasts total investment-grade bond sales this year will reach $2.25 trillion, surpassing the 2020 record of $1.9 trillion set during the pandemic when companies scrambled for liquidity.
Financial institutions and European companies led the borrowing surge, capitalizing on strong investor demand for high-quality dollar-denominated debt. Borrowing costs relative to US Treasury securities have approached their lowest levels since the global financial crisis.
“Everyone is extremely motivated to get back to the market,” said Teddy Hodgson, global co-head of investment-grade debt capital markets at Morgan Stanley.
While January typically sees heavy bond issuance, companies are starting their funding programs even earlier than usual this year. Hodgson explained that firms want to get ahead of an expected issuance surge later in 2026 driven by mergers and acquisitions activity and technology companies’ massive AI infrastructure investments.
Massive Oversubscription Signals Strong Demand
Several bond offerings during the week attracted overwhelming investor interest. French telecommunications company Orange raised $6 billion after receiving orders exceeding $34 billion across five separate tranches of debt, according to people familiar with the transaction.
Japan’s Sumitomo Mitsui Financial raised $5 billion, while US chipmaker Broadcom secured $4.5 billion in financing. The heavy oversubscription demonstrates abundant investor appetite for corporate debt despite already tight credit spreads.
Minimal Risk Premium Despite Global Events
Markets largely ignored the dramatic US capture of Venezuelan President Nicolás Maduro, with investors attaching minimal risk premium to corporate debt. The cost of borrowing for investment-grade companies stands at just 0.79 percentage points above government bonds, according to Ice BofA data.
“The market just shrugged it off because there’s so much cash out there, and investment-grade fundamentals continue to be strong,” said Kyle Stegemeyer, head of investment-grade debt capital markets and syndicate at US Bancorp.
Earnings for US high-grade bond issuers are expected to have grown 11.2 percent in the fourth quarter of 2025, according to Bank of America estimates, supporting the strong credit fundamentals driving investor demand.
Some Investors Exercise Caution
Despite the borrowing frenzy, the narrow spread between corporate debt yields and ultra-safe Treasury securities is causing some investors to remain cautious.
“The number of deals is overwhelming and there will eventually be investor fatigue,” said Neil Sun, a portfolio manager at RBC BlueBay Asset Management. “We are building up cash buffers to capture opportunities at wider [credit] spread levels.”
Sun compared the current environment to a buffet where “people always get too excited for the first couple of bites,” suggesting that selectivity will become more important as the year progresses and deal volume continues mounting.
What This Means for Markets
The record-breaking bond issuance says a lot about how companies are thinking right now. Many are moving quickly because borrowing is still relatively cheap, and that window may not stay open for long. A big part of this money is going into expansion plans, especially around AI, where large technology companies are committing massive amounts of capital. The rush also suggests an expectation that borrowing could get harder or more expensive later in the year as more bonds hit the market or interest rate views start to shift.
This wave of corporate borrowing also has knock-on effects for cryptocurrency markets. When companies can easily raise money through regular debt, there is less reason to look toward riskier or less stable options. At the same time, insurance firms and pension funds are showing strong interest in these bonds, which tells a clear story: solid returns are available in familiar, lower-risk assets. That makes digital assets a harder sell for institutions focused on steady income and capital protection.
That said, the picture is not entirely negative for crypto. The same AI-driven investment boom behind much of this borrowing could still lift blockchain and crypto infrastructure companies that align themselves with broader tech growth. Over the next few months, it will become clearer whether this pace of bond issuance can continue or whether investors start demanding better returns. For now, strong company balance sheets, plenty of available cash, and steady institutional demand are keeping this bond market unusually active.
