A senior European bond banker at JPMorgan has indicated that the heavy wave of debt issuance by AI leaders is testing the bond market's capacity, with price premiums emerging as a clear indicator. "We will keep testing at what price levels investors are willing to participate in these transactions," said Matthias Reschke, JPMorgan's head of European investment-grade financing, in an interview. "We have no doubt these bonds can be placed smoothly; the entire issue comes down to pricing," he added.

Reschke noted that in the U.S. market, bonds issued by hyperscalers are currently trading at a credit spread roughly 55 basis points wider than other corporate bonds, a level he described as a "material premium." Data shows that hyperscalers—typically including Meta, Alphabet, Oracle, Microsoft, and Amazon—have raised more than $220 billion across seven different currencies so far this year. JPMorgan ranks among the top three investment banks underwriting euro-denominated bonds for these companies in 2024. Recommended reading: The AI bond boom cools as large tech firms face tougher and costlier debt issuance.