This report does not constitute a rating action. As year-end approaches, borrowers are facing simmering geopolitical risk, elevated yields, and AI concentration risk. Nevertheless, global debt issuance has remained strong as investor demand remains supportive. Corporate issuers continue to be broadly resilient, but we expect to see a widening dispersion between the stronger and weaker rated issuers as debt service costs rise and as older, cheaper debt gets refinanced at materially higher rates. Issuers refinanced upcoming maturities during the third quarter of 2026. Some of this might be frontloading of refinancing activity due to potential geopolitical uncertainty and market expectations for further rate hikes from major central banks, which is likely to lead to higher financing costs for corporate borrowers.
