(Bloomberg) — Artificial intelligence spending and the growth of the private credit market aren’t just spurring companies to borrow more, they’re also helping to generate fresh records for corporate-bond trading.
An average of $50 billion in investment-grade and high-yield bonds changed hands each trading day last year, according to Crisil Coalition Greenwich, a provider of research and data for the financial services industry. That marked a record level, up from $46 billion in 2024, the latest in a string of records as the market benefits from longer-term changes like growing electronic trading.
A big chunk of trading comes from new bond sales, which often lead investors to sell a company’s older debt and buy fresh securities. Dealers including Morgan Stanley and JPMorgan Chase & Co. This year expect record issuance for high-grade US corporate debt, fueled in part by companies funding investments in artificial-intelligence infrastructure, like building data centers.
Some of the borrowing for those investments is happening in private markets, as when Meta Platforms Inc. and Blue Owl Capital Inc. raised about $27 billion of high-grade debt for a data center in rural Louisiana last year. That in turn can spur more trading in private credit, where investors are increasingly looking for ways to sell out of positions, said Rehan Latif, global head of credit trading at Morgan Stanley.
“I view it very much as the biggest single opportunity coming into 2026,” said Latif in an interview. “Every single time a new market is created, there is a little bit of a lag before the secondary market kicks off. The reality is this is the right time for it to happen.”
The longer-dated bonds that tech companies and utilities often sell to help fund investments tied to AI can also spur more trading, according to Sam Berberian, global head of credit trading at Citadel Securities, and Jeff Eason, head investment-grade desk analyst at the firm.
Prices on these bonds tend to swing more as the yield curve shifts, making the securities more interesting to hedge funds and other investors that trade actively in the market.
Related: Citadel Securities Launches AI Bond Trading Baskets for Hedging
As companies borrow more for AI projects, investors are being forced to work harder to make sure they don’t have too much exposure to tech companies and utilities across their portfolios. Heightened concerns about a potential AI bubble are also expected to drive increased hedging activity in the credit default swap market, further boosting trading volumes, according to market makers.
Trading volume has been growing for years thanks to shifts like portfolio trading, which allow investors to buy and sell large blocks of securities in one fell swoop. Traders are adopting innovations long familiar to equities — such as fixed-income exchange-traded funds, electronic execution and high-speed trading strategies. Ignoring other factors, a more active trading market should help pull spreads tighter, as the illiquidity premium on bonds shrinks.
Investors are also shifting toward more macro-level strategies that use a wider range of instruments instead of focusing on single-name, idiosyncratic trades, according to Alex Finston, partner and co-head of US credit trading at Goldman Sachs. These changes have helped slash corporate-bond trading costs by as much as two-thirds in recent years, added Finston.
“The scalability by which our clients are able to access liquidity has never been better and I would expect that that will continue to grow over time,” Finston said in an interview.
While market participants expect automated credit trading to continue to grow, voice trading still plays a critical role. Grant Nachman, founder and chief investment officer of credit firm Shorecliff Asset Management, says there are limits to how far electronic execution can go — particularly in less liquid parts of the market. Beyond execution, he adds buy-side firms also risk weakening their market standing if they shift too much volume away from voice trading.
“There’s likely a ceiling on how much electronic trading there can be,” he said, pointing to the continued importance of allocations, research, market color and long-term partnerships. “It helps to be a relevant voice counterparty to get some of that.”
Whatever the form, trading was active in 2025, and will probably continue to grow this year. Other related markets, including credit ETFs and credit derivatives, are also seeing more volume.
“We expect trading activity to pick up in 2026,” said Citadel Securities’ Berberian.
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