Corporate Bonds

Larry Ellison is telling credit analysts he'll "do whatever it takes" to reduce leverage at a combined Paramount-Warner Bros Discovery, backing his $108 billion hostile bid with personal guarantees worth $40.4 billion. The Oracle founder faces the prospect of liquidating significant Oracle holdings if his son David's media empire hits trouble, as Bloomberg reports detail. With projected debt hitting 6.8x EBITDA, Ellison is betting his fortune on proving synergies can actually materialize in media consolidation. When billionaires pledge their wealth, someone usually gets hurt.

Lifestyle International is scrambling to refinance an HK$8 billion loan secured against Sogo's Causeway Bay flagship store with less than a month until maturity. Lenders paused routine earnings covenant checks six months ago after the delisted department store operator missed profitability thresholds. The successful refinancing of a separate HK$7.85 billion Kai Tak facility last year shows banks remain willing to lend, but Causeway Bay's cash flows reflect Hong Kong retail's structural headwinds from e-commerce and subdued tourism recovery.

UBS issued the first AT1 bond in Australian dollars since APRA decided to phase out domestic bank hybrids, and the deal was heavily oversubscribed. Australian banks cannot issue new AT1 capital after January 2027, creating a A$40-45 billion hole in retail portfolios as existing hybrids get called by 2032. Foreign banks are stepping in with AUD-denominated AT1 to capture yield-hungry Australian investors, particularly retirees and self-managed super funds who built portfolios around ASX-listed bank hybrids. APRA's move followed Credit Suisse's AT1 wipeout, but global banks see an opening to diversify their investor base and reduce competition from local majors.

NTT Finance has postponed a planned yen bond issue until June or later, becoming the latest casualty of Japan's savage government bond selloff. The delay comes as JGB yields have climbed sharply, making domestic funding suddenly expensive compared to the company's active dollar and euro programs. NTT Finance issued $500 million floating rate notes due 2031 in March, highlighting how Japanese corporates are increasingly bypassing their home market for cheaper offshore funding.

Wall Street's AI financing machine is hitting capacity constraints. Alphabet's $17 billion bond sale was still being priced when the company started hawking additional debt, forcing underwriters to consider overseas markets to absorb the supply. The scale and clustering of AI infrastructure debt is straining even investment-grade credit markets as hyperscalers rush to fund data centers, chips and power systems. When the highest-quality borrower in tech needs to diversify funding sources, it signals the domestic corporate bond market is approaching saturation on AI-related issuance.

China Vanke, the country's second-largest developer, is seeking bondholder approval to delay payments after initially declaring the property downturn had bottomed out, then retracting the call. With 80 million unsold homes clogging the market and 85% of household wealth gains since 2021 evaporated, Beijing's October declaration of a property bottom looks increasingly hollow. If even a state-backed giant like Vanke can't manage its debt, the entire 'managed contraction' narrative collapses.

Taiwan's life insurers have quietly become the world's largest foreign holders of US corporate bonds, owning over $400 billion in American debt. Their hedging strategy shifted dramatically last year, moving from currency swaps to direct dollar holdings as Fed rate cuts became inevitable. This pivot gives Taiwanese insurers more flexibility than European peers locked into expensive hedges. The move also explains why US corporate bond yields have stayed compressed despite rising Treasury rates.

The bond market's new kings aren't wearing suits. AI hyperscalers borrowed $121 billion last year — more than four times their historical average — and analysts expect them to hit $140 billion annually through 2028, potentially exceeding the Big Six banks' $157 billion. Meta's $30 billion October deal was the largest non-M&A high-grade bond ever, while Oracle's credit default swaps tripled after its $18 billion September raise. The supply shift is reshaping credit markets: hyperscaler capex needs are driving net corporate issuance up 30% to $945 billion this year, forcing traditional bank issuers to step back from their record Q1 pace.