Data from LSEG Lipper reveals that U.S. bond investors poured an additional $4.3 billion into high-grade bond funds in the week ending Wednesday, marking the 11th consecutive week of inflows. This trend remains robust as investors seek out bonds that still offer attractive yields. Following a record $43.3 billion inflow into investment-grade bond funds in January—the largest monthly inflow in five years—recent capital has continued to move into short- and intermediate-term investment-grade bond funds. The sustained inflows have provided strong support for corporate bond issuance demand this year. So far in 2026, high-grade companies have issued approximately $309 billion in U.S. bonds, an increase of nearly 30% compared to the same period last year. This growth has been partly driven by large-scale bond issuances from technology giants such as Oracle (ORCL.US) and Alphabet (GOOGL.US), the parent company of Google. Market demand has been exceptionally strong, with investor orders for new bonds averaging 4.1 times the actual issuance amount, up from 3.8 times last year. Another indicator of demand strength—the new issue premium, also referred to as the new issue concession—averaged just 0.02 percentage points, or 2 basis points, this year. That figure stood at 3.3 basis points in the previous year. As of Wednesday, the risk premium, or spread, on U.S. high-grade securities has narrowed by 0.03 percentage points to 0.75 percentage points this year, approaching multi-decade lows. Ayako Yoshioka, Director of Portfolio Advisory at Wealth Enhancement Group, noted that such high valuations leave little room for further improvement and expressed a neutral outlook on the credit market. She stated, "We don't see any bearish catalysts, but given where spreads are currently, there is also very limited upside potential." Investor demand remains strong. According to a CreditSights report, net inflows into investment-grade corporate bond ETFs reached $2.8 billion in the week ending February 11, the highest in 14 weeks and the ninth consecutive week of net inflows. Per Bloomberg index data, the average yield on investment-grade corporate bonds stood at 4.8% on Wednesday, well above the 20-year average of 4.15%, which has been a key driver of demand. Recent encouraging U.S. economic data, including stronger-than-expected job growth in January, has eased concerns about near-term weakness in the credit market. Technology giants referred to as "hyperscalers" are expected to continue issuing bonds in large volumes. Morgan Stanley predicted last year that U.S. investment-grade bond issuance could surpass $2 trillion in 2026, reaching a historic high, driven by artificial intelligence investments. Christian Hoffmann, Head of Fixed Income at Thornburg Investment Management, noted in a briefing, "Spreads for hyperscalers within the index have widened. AI is having a material impact on the supply side." However, Zachary Griffiths, Head of Investment Grade and Macro Strategy at CreditSights, suggested that such large-scale issuance, combined with any potential deterioration in the U.S. economy, could eventually weigh on valuations this year. Griffiths commented, "We believe hyperscale issuance will create technical pressure in the high-grade market, but for now, investors appear reassured given current yield levels."