Tech companies' credit quality remains strong, but supply dynamics are now outweighing fundamentals in determining bond pricing and spreads.
Too little corroboration in the last 3 days to call a trend (3 articles). Watching for it to gain traction.
Mainstream financial press is carrying this — attention has broadened beyond specialist outlets.
"While fund managers remain comfortable with the credit quality of companies such as Amazon and Alphabet, Google's parent company, they are increasingly demanding higher yields to accommodate the flood of issuance. Supply dynamics, though, are beginning to outweigh fundamentals, especially in terms of pricing bond deals."
"The wave of debt issuance funding the artificial-intelligence buildout is testing the limits of investor demand, with some large bond buyers warning that the market is showing signs of indigestion. While fund managers remain comfortable with the credit quality of companies such as Amazon and Alphabet, Google's parent company, they are increasingly demanding higher yields to accommodate the flood of issuance."
"Tech spreads are currently at 89 basis points, 9 basis points wider than the overall investment grade market. Tech has gone from trading materially through the market to actually trading wider than the market. Supply dynamics, though, are beginning to outweigh fundamentals, especially in terms of pricing bond deals."