The Credit Edge by Bloomberg Intelligence Barclays’ Rogoff Sees Risk of AI Bust as Debt Issuance Ramps Up
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Dec 4, 2025 Brad Rogoff, Global Head of Research at Barclays, shares insights on the potential risks in credit markets driven by an AI funding frenzy. He discusses how increased issuance may lead to vulnerabilities if expectations aren’t met. Rogoff emphasizes sector dynamics, encouraging caution around low-grade bonds while highlighting the importance of quality in portfolios. With a focus on 2026 forecasts, he predicts wider spreads but not an imminent recession, urging investors to remain vigilant amid evolving market conditions.
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Late-Cycle But Not End-Of-Cycle
- Credit spreads are very tight and volatility is low compared with history.
- Barclays expects modest widening in 2026 with IG spreads in the low 90s and high-yield around ~325bps.
AI Wave Will Boost Issuance
- Tech and AI-driven CapEx will materially raise net supply in IG next year.
- Barclays projects net supply could be up ~40% in 2026, led by tech and M&A.
Private Credit Skews Toward Tech
- Private credit and leveraged loan markets are heavily concentrated in tech and business services.
- Those sectors make up roughly half of the private credit market when combined with related areas.