Fixed Income: Navigating the AI Capex Boom

Sean Banai, CFA
Head of Multi-Sector Fixed Income

Cliff Andrus, CFA
Senior Vice President, Head of Asset-Based Finance

Shannon Juhan, CFA
Senior Vice President, Head of Infrastructure

AI-related debt is now over 15% of the U.S. investment grade bond universe and responsible for multiple $10+ billion private placements, and that’s not even taking into account associated sectors. Here’s where we see potential— and pitfalls—for fixed income portfolios.

Key takeaways

• AI capex is driving a once-in-a-cycle fixed income supply shock, with AI-related debt now a meaningful share of both public and private investment grade (IG) issuance.
• This dynamic makes cross-portfolio risk management and disciplined structure selection more necessary than ever.
• In a market of ever-expanding and often untested structures, we see the best relative value in a barbell strategy of shorter-dated private placements and longdated public IG bonds.
• Private placements in GPU financing, construction finance, and other ABF deals stand out as offering both alpha and risk control.
• Public IG hyperscaler bonds provide duration and revenue diversification on the long end, while IG data center project bonds add spread.

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A note about risk: The principal risks are generally those attributable to bond investing. All investments in bonds are subject to market risks as well as issuer, credit, prepayment, extension, and other risks. The value of an investment is not guaranteed and will fluctuate. Market risk is the risk that securities may decline in value due to factors affecting the securities markets or particular industries. Bonds have fixed principal and return if held to maturity but may fluctuate in the interim. Generally, when interest rates rise, bond prices fall. Bonds with longer maturities tend to be more sensitive to changes in interest rates. Issuer risk is the risk that the value of a security may decline for reasons specific to the issuer, such as changes in its financial condition. High yield securities, or “junk bonds,” are rated lower than investment grade bonds because there is a greater possibility that the issuer may be unable to make interest and principal payments on those securities. Foreign investing does pose special risks, including currency fluctuation, economic and political risks not found in investments that are solely domestic. Emerging market securities may be especially volatile. Investments in mortgage-related securities involve exposure to prepayment and extension risks greater than investments in other fixed income securities. The strategy may use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and could have a potentially large impact on performance. Investments in commercial mortgages involve significant risks, which include certain consequences that may result from, among other factors, borrower defaults, fluctuations in interest rates, declines in real estate values, declines in local rental or occupancy rates, changing conditions in the mortgage market, and other exogenous economic variables. All security transactions involve substantial risk of loss. The strategy will invest in illiquid securities and derivatives and may employ a variety of investment techniques, such as using leverage and concentrating primarily in commercial mortgage sectors, each of which involves special investment and risk considerations. Other risks include, but are not limited to: credit risks; credit default swaps; currency; interest in loans; liquidity; other investment companies’ risks; price volatility risks; inability to sell securities risks; U.S. government securities and obligations; sovereign debt; and securities lending risks.

5722756

¹ As of 05/31/26. Source: Voya IM.

² As of 06/15/26. Source: JP Morgan, Morgan Stanley.

³ Specifically, capex booms in a particular sector can be associated with significant spread widening for that sector in the IG credit market. For more, see our Fixed Income Perspectives: How AI Spending Is Creating a More Selective Market.

⁴ As of 06/15/26. Source: Bloomberg; Voya IM.

⁵ As of 06/15/26. Source: Bloomberg; Voya IM.

Past performance does not guarantee future results. This market insight has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing, or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain statements contained herein may represent future expectations or other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. Actual results, performance, or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults, (5) changes in laws and regulations, and (6) changes in the policies of governments and/or regulatory authorities. The opinions, views, and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Fund holdings are fluid and are subject to daily change based on market conditions and other factors.

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