Bond bonanza

Wall Street’s bond window is wide open—and companies are leaping through it.

Over the past week, a wave of companies rushed to tap debt markets:

• Nebius: Announced a $3.75 billion bond offering a day after inking its $27 billion Meta Platforms deal in order to fund data center expansion.
• Amazon: Raised $37 billion in the US bond market (with another deal planned for 14.5 billion euros), drawing $126 billion in demand and marking the fourth-largest corporate bond sale ever.
• Honeywell: Issued $16 billion in a nine-part bond deal ahead of its planned three-way spinoff, set to complete by Q3.
• Salesforce: Sold $25 billion in bonds but saw relatively weak demand, with the deal just 1.4x oversubscribed compared to the 4.1x average this year, per Bloomberg data.
• Airbnb: Launched a $2.5 billion bond deal that will double its debt load, reversing years of deleveraging and surprising investors.

Debt deluge

Last Tuesday marked the biggest day of investment-grade bond sales ever, and last week saw the second-highest volume of corporate bond sales in history. Companies are taking advantage of brief moments of market calm when oil prices stabilize and volatility drops to tap debt markets before conditions shift again.

There’s also growing concern that borrowing costs could soon rise. With oil prices remaining above $100 per barrel, inflation could soon rise, prompting the Fed to take action. While the FOMC will likely keep interest rates steady after its meeting concludes tomorrow, markets now expect the Fed to raise interest rates over the next three months rather than cut them.

Finally, public credit markets remain highly supportive and resilient—at least for now. But in private markets, concerns of a bubble have been brewing, as institutions from banks to private credit firms continue to cap redemption rates. Companies want to get ahead of any emerging stress, which could spread into broader credit markets and tighten liquidity across the system.

What does this mean for investors?

Stocks generally fell after companies completed their bond sales when markets digested the increase in leverage. But investors should take a close look at the motivations behind each deal.

For Nebius, the issuance appears opportunistic, with the company looking to ride the momentum from its Meta deal while funding data expansion. Although shares fell 10.41% today, Citi initiated coverage with a Buy rating, saying the firm is a winner among the neoclouds data centers, and that investors should ignore short-term volatility—though analysts did label it a “high risk” Buy.

Salesforce, on the other hand, signals more caution. Ongoing AI disruption concerns have weighed on sentiment, and investors are demanding wider spreads on its debt. Unlike Nebius, the issuance feels more necessary than opportunistic, pointing to weaker confidence.

While many companies are seizing the opportunity, given current market conditions, they’re not all doing so on the same terms, and investors should watch how the proceeds are used.—SY