Global bond issuance set to grow at slowest pace in five years in 2027, S&P Global Ratings says

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Bond issuance has surged in recent years as governments' funding needs for everything from defence to supporting ageing populations rise, companies need to refinance their maturing debt, and big-tech companies ramp up capital expenditure to invest in AI.

Here are the details from S&P's report:

In 2027, global bond issuance is expected to rise by a mere 2.7%, marking a stark decline compared to this year's growth. According to S&P Global Ratings, factors like increasing interest rates and geopolitical tensions contribute to this slowdown. Additionally, with both governments and firms facing heightened funding needs, borrowing appetites may wane.

* Global bond issuance expected to grow by 2.7% in 2027, down from the 12.2% growth rate expected this year.

* Global bond issuance expected to hit $11.7 trillion in 2026.

* Hyperscaler bond issuance nearing $300 billion in 2026, AI-related capex expected to top $1.3 trillion next year.

* Hyperscaler bond issuance likely to increase next year but pace of growth to slow.

* Next year may prove pivotal for debt markets as rising interest rates clash with massive capex funding needs, potentially testing investor and issuer nerve.

* China likely to remain a source of issuance growth, helped by declining sovereign bond yields.

* Corporate bond spreads have ground tighter as investor demand for sovereign and corporate debt remains robust.