Global bond issuance has surged to unprecedented levels this year as borrowers capitalize on favorable market conditions to fund everything from artificial intelligence (AI) projects to resurgent M&A activity. Data shows total bond issuance in 2025 has already reached $5.95 trillion, surpassing the $5.93 trillion recorded for all of 2024—with over a month remaining in the year and Wall Street bracing for its busiest November in over a decade.

The record issuance has been driven primarily by financial institutions and governments seeking to cover widening budget deficits. Meanwhile, massive bond sales from tech giants like Alphabet (GOOGL.US) and Meta Platforms (META.US) have boosted the communications sector's debt volume by two-thirds year-over-year. Despite the flood of supply widening corporate credit spreads, global credit risk indicators remain near their lowest levels since 2007. Demand stays robust, with bond investors enjoying total returns exceeding 7% this year—the best performance in five years.

"We're in a period of historic demand for credit, flexibility, and liability management," said Sabrina Fox, a leveraged finance expert at Fox Legal Training. "All these factors are aligning perfectly in market pricing."

Meta's $30 billion bond offering on October 30 marked the largest U.S. high-grade corporate debt sale since 2023, attracting $125 billion in orders—a record for public corporate bonds. Alphabet returned to European markets on November 3 with a €3 billion multi-tranche euro-denominated benchmark issuance to fund its record AI and cloud infrastructure investments. Japan's SoftBank, another AI heavyweight, issued dual-currency bonds in October.

"It's entirely reasonable to assume significant capital expenditures will be debt-funded," noted John Sales, Goldman Sachs' head of Americas investment-grade syndicate, highlighting tech giants' strong balance sheets and ability to leverage amid low spreads and anticipated Fed rate cuts.

Investor appetite continues to match supply. BNP Paribas estimated in September that U.S. investors held $74 billion more in reinvestable cash than available corporate bonds. The issuance wave has extended into November after record-breaking September and October volumes, though the window may narrow ahead of December holidays.

"Those who preserve liquidity for the next two weeks could benefit from an expected supply drought," said Matt Brill, Invesco's head of North American investment-grade credit. U.S. firms are also tapping European markets aggressively, with Alphabet, Colgate-Palmolive, Booking Holdings (BKNG.US), and Morgan Stanley (MS.US) all issuing euro bonds this week. Verizon (VZ.US) priced its first sterling bonds since 2020.

European issuance remained strong through Thursday, with 11 borrowers including France's Orange, Spain's CaixaBank, and Austria's Raiffeisen Bank International preparing new deals. Orange is launching its largest five-tranche euro offering since 2019.

Public sector borrowing has been pivotal to record issuance since pandemic-induced budget imbalances. Government and agency debt now accounts for 69% of investment-grade issuance—the highest share since the 2010 global financial crisis. The IMF projects global public debt will exceed 100% of GDP by 2029, a postwar record. Spain leads sovereign issuance with three offerings totaling €35 billion ($40 billion), while the UK's £14 billion ($18 billion) September gilt sale and Italy's €18 billion January offering rank among the year's largest transactions. Both Spanish and Italian bonds drew over €140 billion in orders.

However, the boom isn't evenly distributed. Recent mega-deals have come exclusively from high-grade, household names, potentially crowding out other issuers. Signs of oversupply are emerging, with U.S. high-grade spreads widening to 82 basis points on Monday—the highest since July 1.

"Many investors are happy to sell lower-rated paper for these new liquid AA bonds," said Mark Clegg, Allspring Global Investments senior fixed-income trader. "The question is when they'll feel comfortable maintaining overweight tech positions."

Abundant liquidity is also evident in high-yield markets. Banks including Bank of America, Citigroup, and Morgan Stanley recently participated in history's largest leveraged buyout financing—a $20 billion debt package for Electronic Arts' (EA.US) acquisition. Global M&A topped $1 trillion in Q3, only the second time on record, marking a turnaround from earlier tariff-related slumps.

"Next year will see major EMEA deals given lower rates, improved valuation perceptions, and pent-up transactions," predicted JPMorgan's EMEA co-head Conor Hillery. Goldman Sachs CEO David Solomon similarly noted "a dramatic pickup in activity."

Morgan Stanley's global debt capital markets head Anish Shah observed: "The market for single-B or BB acquisition financing could double this year's largest deals. Capacity is extremely high—we're in expansion mode for quality assets. Combining syndicated loans with private credit could significantly boost debt volumes given current liquidity abundance."