Feb 18, 2026
UBS has updated its 2026 forecasts for certain U.S. credit markets, raising its projection for investment grade bond sales from technology companies while lowering its forecast for leveraged loans. The revision was detailed in a note from the bank’s global credit team.
Forecast Revisions
UBS raised its U.S. investment grade tech issuance forecast to $360 billion from $300 billion. This adjustment contributed to an increase in the bank’s overall forecast for total U.S. investment grade debt issuance, which moved to $1.8 trillion from $1.725 trillion, meaning tech is expected to account for a fifth of the total. Concurrently, UBS cut its U.S. leveraged loans forecast to $360 billion from $450 billion.
Drivers for Tech Issuance
The forecast increase is linked to rising capital expenditure plans announced by several megacap tech companies, including Meta, Amazon, and Alphabet, during a recent earnings season. UBS analysts noted that if recently announced increases are realized, aggregate capital expenditure spending by hyperscaler companies could approach $770 billion for 2026, which is around 23% higher than the bank’s previous expectations. This spending is expected to be funded, in part, through debt markets, as seen in late 2025 when big tech firms shifted to tapping debt markets to fund AI data centers, leading to a surge in issuance. UBS stated that hyperscaler public debt issuance could increase by an additional $40 billion to $50 billion, reaching as much as $240 billion.
The bank also expects more non-U.S. dollar bond supply in the tech sector compared to previous years, citing Alphabet’s recent activity in the sterling and Swiss franc markets as part of a $31.51 billion global bond raise as an indication that U.S. tech companies will continue to look globally to fund capital expenditure.
Market Context and Leveraged Loans
While tech spending is rising, big tech stocks have fallen in 2026 as investors question whether heavy spending on artificial intelligence will generate sufficient returns to justify high valuations. Furthermore, concerns over how powerful AI models might disrupt traditional business models have proliferated through markets in recent weeks.
UBS is lowering its leveraged loan issuance forecast based on an expectation that disruption created by AI is most underpriced in leveraged loan and private credit markets. The bank said that potentially wider spreads in the leveraged loan space due to higher disruption risk could negatively impact refinancing activity.