A week that began with a bang kept going with an intensity that seemed to have a life of its own despite any noise, geopolitical or otherwise, in the background.

One might ask why that is the case. The answer is somewhat simple to the bond geeks like us at IGM – buying these quality credits at the yields they are offering is a no-brainer ahead of possible interest rate cuts, a fast-growing economy, and even with the threat of more market turbulence ahead.

While it was a rough week for software and adjacent sectors, corporate earnings accelerated, economic survey data surprised, and market breadth improved. Pro-cyclical benchmarks like banking and energy surged to close at record highs.

Though we are nowhere close to the issuance mayhem during Covid, this year so far definitely feels like it has the potential to outdo that pace.

For a year that could produce as much as $2trln of bond supply without the same level of existential anxiety during the pandemic speaks volumes of the depth of the high-grade primary market that has grown in leaps and bounds over the last two-to-three decades. It also showcases the growing needs of a corporate world that is transitioning to a new technological level, which some say harkens back to the days before the explosion of the internet.

Is that really the case?

Are companies borrowing more than they require to fund the development of a technological infrastructure that may not return yields to even pay back this debt? These are valid questions and a debate that, in some part, is causing volatility in broader markets.

But for credit, those doubts are not that serious, at least for now. Companies building the infrastructure, like Oracle, are raising debt, even at a whopping $25bln, which is a fraction of the overall cost of this infrastructure build or simply put manageable levels of debt that needs to be serviced in these bond markets. Still, Oracle’s new bonds reacted to the nervousness in broader markets, with long-end spreads widening 15-20bp from new issue levels.

But there is captive support to this market in the strength of appetite from investors who have mandates to buy investment-grade bonds at yields that, at some point, may go away.

Even the retreat in equities hardly dented sentiment in credit.

As one senior syndicate banker pointed out: "Liquidity in debt, unlike equities are fragmented. The market can remain irrationally historically tight, longer than you can stay liquid."

This intensity was on display this week, not just in terms of deal sizes and volumes but in way of the fundamental strength of a market that seems intent on growing in leaps and bounds through this year, irrespective of the background noise.

Oracle’s eight-part $25bln kicked off proceedings on Monday and got peak books of over $129bln – the largest ever on any high-grade deal – and the final was $108bln, which, when compared to the top 10 largest deals and the books they got ranked fourth. Link please.

Oracle was the tenth largest bond to be issued in this high-grade bond markets and the fact that it hardly triggered any fatigue a day after and after a record $219.45bln January showed how prepared this market is for an over-the-top 2026.

Nine sizeable deals then sets of smaller-sized deals followed the Oracle jumbo that took the week’s tally to a whopping $61.05bln making it the busiest ever February week on record. It also blew the highest estimates of $51bln out of the park.

For a market that was running at this pace, the week ended with solid metrics.

The average order book coverage for the week was 3.54X compared to 4.31X for January while new issue concessions averaged at 0.89bp versus 1.02bp for January. Book attrition was also impressive with at 28.8% compared to 20% in January.

All of this strength points to another hectic week with syndicates estimating and average $43bln and a high of $50bln. Alone, four of the largest tech companies - Amazon, Google, Microsoft, and Meta - have pledged $650 billion in capex this year.

Undoubtedly, there will be another debt offering to fund AI infrastructure, perhaps as soon as next week. There are some murmurs of a large deal. And Amazon filed a shelf registration for a debt issue with the SEC on Friday.

However, like every other weekend this year, it is not without event risk. Talks between the US and Iran appear to be ongoing, but the US government has urged any citizens in Iran to immediately leave the country.