Tech Credit Risks Skyrocket as Dollar Sentiment Shifts

Big Tech credit risks have risen sharply, according to recent data. Hyperscaler bond meltdowns are becoming increasingly common, and spreads on tech debt have steadily widened over the past year.

A report by Bank of America found that 43% of hyperscaler debt supply consisted of bonds with maturities exceeding 10 years, compared to 24% in M&A debt deals and 23% in other non-financial issuance. This trend is contributing to a growing concern among investors about the creditworthiness of these companies.

Meanwhile, sentiment on the US dollar has been shifting towards bullishness, with speculative traders holding $43.3 billion in positions that benefit from a stronger currency as of July 21.