It was a pleasure to welcome Amanda Lynam, Chief Credit Strategist in Global Investment Research at Goldman Sachs, back to the podcast. Nearly three years after our first conversation, much has changed! With the extraordinary capital expenditure cycle underway in artificial intelligence, there is no shortage of questions about how the corporate credit market will finance it and what the growing supply of debt means for investors.

We begin with Amanda’s assessment of the broader credit landscape. She describes a market supported by resilient economic growth, generally solid corporate fundamentals, and powerful demand from yield-oriented investors, including insurers, pensions, and foreign buyers. These forces have kept periods of spread widening relatively brief, even as issuance has accelerated.

We then turn to the scale of the AI buildout. Amanda walks us through Goldman Sachs’ estimates for hyperscaler capital expenditures and debt issuance, along with the financing needs of data centers, chips and other businesses supporting the AI ecosystem. We discuss why companies are raising debt before an immediate funding gap appears, how much issuance the investment-grade market can absorb and why private markets may take on a larger role as the cycle progresses.

Importantly, Amanda sees little evidence so far that AI borrowing is crowding out other corporate issuers. Instead, investors appear increasingly attentive to their total exposure to the theme across equities, bonds, and private assets. That creates a renewed role for sectors such as banks, energy, healthcare and food and beverage as sources of diversification.

Lastly, we explore the risks that could challenge today’s supportive credit backdrop, particularly an increase in rates volatility that weakens yield-based demand. Amanda also discusses the evolving high-yield market, the software refinancing calendar, and the role of real assets in portfolio construction.

I hope you enjoy this episode of the Alpha Exchange, my conversation with Amanda Lynam.

Amanda Lynam, Chief Credit Strategist in Global Investment Research, Goldman Sachs

Alpha Exchange

Amanda Lynam, Chief Credit Strategist in Global Investment Research, Goldman Sachs