Tech Debts Elevate Credit Risks

The credit risk levels for major technology companies have increased, especially for "Meta" and "SpaceX," with expectations of a widespread wave of bond issuance following their earnings reports, amid pressures on debt markets from increased supply and higher borrowing costs. Oracle's risk level reached 343 basis points, the highest ever, while the "Meta" index hit an all-time high before their earnings announcement, which is expected to include the issuance of substantial bonds to fund their investments in artificial intelligence. Investors' expectations for large debt issuances by companies to finance expansion have grown, amid declining confidence in the market's ability to absorb the new funding volumes, and bond insurance costs have risen to record levels.

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