Pandemic Deja Vu Returns as Companies Unleash Biggest Borrowing Blitz Since 2020

Ah sh*t, here we go again…

I don’t know about you, but anytime I see something being compared to pandemic times, I’m not sure if I should be really excited or concerned that things are about to get really bad.

Case in point, U.S. companies sold more than $95 billion in corporate bonds in the first full week of January alone… the busiest week since the Covid panic of May 2020, and the most aggressive start to a year on record.

Wall Street calls it “strong demand.” Normal people call it “everyone borrowing at the same time because they’re afraid the music’s about to stop.”

Now if you’re not familiar with the corporate bond market, here’s the quick and dirty version: it’s how big companies borrow large sums of money without going to a bank or selling stock. They issue bonds, investors lend them cash, and in return get paid interest over time. Think of it as a corporate IOU with a suit on.

So when you see a ton of corporate bonds being sold all at once, it usually means companies are in “borrow now, worry later” mode. Either money is still cheap, uncertainty is rising, or executives don’t trust that today’s conditions will still exist six months from now. Sometimes it’s all three.

(Source: Fortune)

According to data from LSEG, companies are rushing to lock in funding ahead of what’s shaping up to be a monster year of issuance, driven by two things that never come cheap: AI arms races and M&A feeding frenzies. Translation: data centers don’t pay for themselves, and CEOs still love buying other companies more than improving their own.

“Everyone is extremely motivated to get back to the market,” said Teddy Hodgson of Morgan Stanley. Translation: rates are still good enough and nobody trusts tomorrow.

And he’s not wrong. Morgan Stanley expects $2.25 trillion in investment-grade bond sales this year, blowing past the $1.9 trillion Covid record from 2020. I think we can all agree that’s not a trickle. That’s a debt tsunami.

The early deals were met with borderline unhinged enthusiasm. French telecom giant Orange raised $6 billion after investors threw $34 billion in orders at it. Japan’s Sumitomo Mitsui Financial snagged $5 billion. Chipmaker Broadcom pulled in $4.5 billion, because rumor has it, if you say “AI infrastructure” three times into a mirror, bond buyers appear.

On top of that, borrowing costs are helping stir the frenzy. Investment-grade corporate debt is yielding just 0.79 percentage points above Treasuries, according to ICE BofA… near the tightest spreads since the global financial crisis.

In other words: investors are barely demanding extra pay to lend money to corporations… even while tariffs are flying, World War 3 is being teased like a movie trailer, and cabinet officials are calling economic slowdowns “detox periods.”

Kyle Stegemeyer at U.S. Bancorp has another theory: there’s simply too much cash sloshing around and fundamentals still look solid. High-grade U.S. issuers are expected to post 11.2% earnings growth in Q4, per Bank of America estimates, which gives bond buyers just enough confidence to keep hitting “submit order.”

Europe isn’t exactly sitting this one out either. Italy’s Enel and France’s Veolia both printed $2+ billion deals, while L'Oreal dropped a $1.9 billion bond like it was a new skincare line.

Meanwhile, insurance companies and pension funds are hoovering up high-grade debt to lock in yields before the Federal Reserve starts cutting rates again. Because as long as people keep buying insurance and annuities, someone has to park that money somewhere.

(Source: Financial Times)

Of course, not everyone’s thrilled.

Some investors are starting to get full. One portfolio manager compared it to a buffet: the first few bites are great, but eventually you realize you’re going to regret that fourth plate. Translation: investor fatigue is real, and spreads probably won’t stay this tight forever.

But for now, none of that matters.

Because while equities are busy throwing tantrums and recession headlines are doing laps around cable news, the bond market is telling a very different story. That corporate America isn’t hiding under the desk in fear that things are about to get really bad… it’s maxing out the company card and preparing for expansion.

You have to admit, if this really is a slowdown, companies seem oddly confident for something that’s supposed to hurt. Or maybe this is just what late-cycle capitalism looks like in 2026: panic upstairs, borrowing spree downstairs, and AI servers getting financed either way.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.