US Corporate Finance Gap and 10yr Real Yields
Source: Wei Li (Blackrock) | Link
As more hyperscalers tap the bond market - including international capital and very long dated - to finance capex, some context helps:
Competition for capital has pushed real yields higher (yellow), but the corporate financing gap (red) is still negative. That’s very different from 2000, when financing gap was far more stretched.
Companies CHOOSING to issue are not the same as companies NEEDING to issue. Markets should and do differentiate between debt raised to fund growth and productivity, and debt raised to paper over weakening fundamentals.
References
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