Key Highlights

• U.S. investment grade (IG) primary issuance reached a record level of $1.22tn in H1 2026 driven by hyperscalers, banks, and broader market activity.
• Robust investor demand absorbed the elevated supply as deals consistently priced aggressively even with the record supply.
• BNY iFlow shows that investors became more selective in Q2, favoring higher-quality, shorter-duration credit as rates and inflation concerns rose.

H1 2026 IG credit issuance shatters records

Lead: Record issuance is colliding with a sharper quality bias. U.S. IG primary issuance hit a record $1.219tn in H1 2026, and investors still absorbed the supply with strong demand. But a shift is underway. In Q2, investors became more selective and moved toward higher-quality, shorter-duration credit as rates rose and inflation worries returned.

Record issuance: H1 2026 was the strongest first half for primary issuance in history, up 30% from last year and above the prior peak set in 2020. The market also saw seven deals of $25bn or more, which is more than the past seven years combined.

Issuance across the calendar: IG issuance strength showed up all year (Exhibit 1), with multiple months reaching record or near-record levels. January and June posted the largest issuance levels ever for these months. Levels for February, March, and April were also near the top of the historical range. This pushed both Q1 ($657.6bn) and Q2 ($561.6bn) to historically heavy levels.

EXHIBIT #1: IG H1 2026 PRIMARY ISSUANCE VOLUMES STRONGEST FIRST HALF IN HISTORY 

_{Source: Credit Flow, Bloomberg}

Hyperscalers drive broad issuance: Hyperscaler and financial issuers drove the surge, but issuance was broad based across industries (Exhibit 2). Banks accounted for $378.2bn, or 31.0% of total H1 issuance, while communication, consumer non-cyclicals, utilities, and technology were all active issuers as well.

Hyperscaler jumbo deals: Jumbo deals from hyperscalers helped push total issuance to extreme levels. Hyperscalers, in addition to SpaceX, issued $219bn in all currencies, including $162bn in USD, accounting for 13.3% of total USD IG volume. CreditSights projects hyperscalers will issue $247bn for full-year 2026.

EXHIBIT #2: BANKS, HYPERSCALERS WERE MAJOR H1 2026 ISSUERS

_{Source: Credit Flow, Bloomberg, BNY Capital Markets}

Issuance across tenors: Issuance stayed active across the curve. The largest non-financial issues ranged from the very front end to very long (40–50 year) maturities, with several notable issuances both in and outside of the tech sector.

Demand remains robust: Investor participation in issuance has remained strong enough to support this unusually high level of supply. H1 2026 deals moved 28.38bp inside initial price talk and achieved 4.03x book coverage, resulting in a modest average new issue concession of 2.95bp.

Investors increase holdings, shorten duration and focus more on credit quality

Investor holdings increased: Investors increased holdings across sectors, and tenors for the year with this growth concentrated in Q1. After significant growth in credit holdings in Q1, positioning pulled back slightly in Q2, but holdings remained above their 12-month averages across almost every sector and tenor.

Selective investor positioning: The Fed’s more hawkish turn in Q2 pushed investors to get pickier. As Exhibit 3 shows, high-yield (HY) holdings surged in Q1, only to pull back more sharply in Q2, according to iFlow. Investor holdings of IG increased more steadily in H1 2026. The divergence points to rising investor awareness of credit-quality concerns as rate expectations reset.

EXHIBIT #3: IG AND HY HOLDINGS DECLINED IN Q2 BUT REMAIN HIGHER YTD

_{Source: BNY Markets, Bloomberg
Note: Scored holding is the trailing 1y mean absolute magnitude of holdings}

Duration shortens: Positioning moved shorter as investors cut their long-duration exposure in Q2 (Exhibit 4). The rotation was driven by an increase in yields and a return of inflation concerns. Those pressures hit the long end the hardest, leading investors to stay short as markets began to price the risk of a new Fed hiking cycle and tighter global central bank policy.

EXHIBIT #4: INVESTORS HAVE SHORTENED DURATION OF CREDIT HOLDINGS

_{Source: BNY Capital Markets
Note: Scored holding is the trailing 1y mean absolute magnitude of holdings}

Strong domestic demand: Domestic investor demand kept pace with the record issuance. Aggregate domestic investor holdings of IG increased 3.8% (Exhibit 5), while HY holdings were up 1.3% (Exhibit 6). That steady demand helped support the heaviest issuance calendar on record. 

EXHIBIT #5: DOMESTIC HOLDINGS OF IG CREDIT HAVE RISEN STEADILY

_{Source: BNY Capital Markets}

EXHIBIT #6: DOMESTIC HOLDINGS OF IG CREDIT HAVE RISEN STEADILY

_{Source: BNY Capital Markets}

Domestic investors favor quality: Domestic portfolio managers increased their IG holdings by 29%, suggesting that elevated rates, a resilient growth backdrop, and fading recession fears encouraged investors to lock in attractive yields while remaining higher up in quality. Banks and broker-dealers increased their holdings by 5.7%, mutual funds and ETFs by 3.4%, and insurance companies by 3.0%, with insurers posting the largest dollar gain at $20.9bn, as demand for high-quality income products remained broad based.

Selective domestic HY buying: Growth of domestic HY holdings was dispersed across alternatives (8.0%), pensions (1.9%) and hedge funds (6.1%), indicating that some investor types were willing to extend into lower-quality credit, though others were more hesitant to reach for risk.

More modest foreign demand: Aggregate foreign investor demand for credit was more tepid. iFlow data show that international holdings of U.S. IG credit declined very modestly, by 0.3%, with the reduction in positioning concentrated in Q2. Meanwhile, international investor positioning toward HY credit increased 3.2%. 

EXHIBIT #7: FOREIGN HOLDINGS OF IG CREDIT ARE LOWER AFTER SHARP DECLINES IN APRIL

_{Source: BNY Capital Markets}

Selective foreign IG demand: Foreign insurers (7.1%), banks (8.4%), mutual funds (5.2%) and sovereign wealth funds (6.7%) all grew their holdings, pointing to continued demand for high-quality USD assets. Strong demand from insurance and banks suggests that selling by other investor types might have been motivated by rebalancing – or profit-taking after spread tightening – rather than a loss of confidence among foreign investors for IG credit.

Foreign HY positioning grows: International HY demand was led by mutual funds (6.7%) and sovereign wealth funds (12.0%), mirroring the domestic investor pattern of more deliberate extension into credit risk by certain investor types.

Geographic demand trends: Geographically, foreign demand for IG credit was broad based with inflows coming from Canada (14.4%), the U.K. (13.1%) and Bermuda (11.1%), which were offset by net outflows from Luxembourg and other smaller markets. In high-yield, demand was concentrated in the U.K. (41.8% off of a small base) and Ireland (13%).

Conclusion

H1 2026 credit issuance has broken records, and investor demand has remained robust. Investors continue to put cash to work across credit, with particular interest in high-quality issuance. The preference shift toward shorter-duration, higher-quality paper has reflected changes to the macro backdrop. As long as macro growth stays resilient and yields remain attractive, the market looks well set to support continued heavy issuance.