Goldman Sachs has raised its forecast for U.S. dollar investment grade (IG) gross debt issuance for 2026 to $2.3 trillion, up from $2.1 trillion, and net supply to $1.0 trillion from $850 billion. The bank noted that AI-related issuers account for approximately 24% of this year's USD IG gross supply, contributing to a record year-to-date issuance.
Goldman anticipates continued strong activity into 2027, projecting $2.4 trillion in gross supply. Despite a negative return year-to-date for both USD and EUR IG, Goldman expects yields to decline, which could improve returns, although they would still remain below historical averages.
The rise in global bond yields, driven by concerns over energy costs, government borrowing, and inflation, has impacted returns significantly. For instance, U.S. 10-year Treasury yields have increased by 61 basis points this year, affecting the USD IG payout. Similarly, Germany's 10-year yield has reached its highest level since 2011.
Overall, the report indicates that while the market is currently facing challenges, the influence of AI on debt issuance is a key factor in maintaining momentum in the corporate bond market