IN FOCUS6-8 min read
Schroders Credit Lens July 2026: your go-to guide to global credit markets
Tech’s borrowing spree continues but signs of risk in software.
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Links to all three versions of the Credit Lens are provided below and at the bottom of the page.
Summary:
- Credit spreads remain at exceptionally tight levels vs history, offering little margin of safety (slides 4-5).
- Large amounts of issuance remains a theme but so far it is easily being met by demand (slides 6-7, 39-40)
- foreign demand for US corporate bonds has been rising, despite tight spreads and waning appetite for Treasuries
- ultimately, demand remains because yields are attractive to many buyers, in isolation and vs cash
- Risk has been concentrated in isolated pockets: software spreads have risen to new cycle highs (slide 8-9)
- Private credit is highly exposed to software
- Bond markets have hardly any direct exposure
- Loans have more but manageable: USD riskier than EUR
- For more info, read: How serious are the spillover risks from private credit to public markets?
- Big tech/hyperscalers (slides 10-13)
- borrowing this year has already roughly doubled last year’s record total
- puts upward pressure on index duration/interest rate sensitivity, as they tend to issue longer dated bonds
- spreads have risen vs the market since they started borrowing heavily last autumn
Chart of the month
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Témy