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

Global bond issuance is set to grow at its slowest pace in five years next year, S&P Global Ratings said in a note on Monday, as higher interest rates and rising uncertainties due to the Middle East war could curb issuers' appetite for borrowing.

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:


* 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.