Foreign buying of U.S. investment-grade corporate bonds has remained robust for 15 consecutive months, Citigroup said in a note dated April 27. The Wall Street firm described a clear rotation by overseas investors into technology, media and telecom (TMT) debt and into longer-maturity securities, combined with a pullback from financial-sector bonds.
Citi pointed to the move as broadly consistent with recent patterns in the primary market. "Foreign investors have rotated toward TMT and away from financials, and added more in the 15y+ maturity bucket, in line with recent trends in the primary market," the brokerage wrote.
The note set out several concrete shifts in allocations:
- Share of TMT purchases by foreign investors rose to 26.1% in 2026 from 17.1% in 2025.
- Exposure to financial-sector corporate debt among foreign buyers fell to 39% in 2026 from 53.8% in 2025.
- Demand for bonds maturing in over 15 years climbed to 44.1% of total purchases in 2026, up from 23.7% in 2025.
Citi also identified the countries driving the largest inflows into U.S. corporate bonds since February 2025: Canada, Japan, Norway, Taiwan, Kuwait and Hong Kong. The brokerage noted that holdings from Hong Kong jumped 19.4% following regulatory changes.
Amid these flows, the firm flagged a handful of companies that received positive rating actions, attributing the changes to improved credit profiles tied to AI-related infrastructure buildouts: American Tower, Analog Devices, Keysight Technologies and Cadence Design Systems.
Citigroup emphasized the structural position of U.S. firms in the global market for top-rated corporate debt, noting that U.S. companies make up most of the $11.6 trillion in top-rated corporate bonds outstanding in the U.S. and Europe and that U.S. issuers provide the bulk of bonds maturing beyond 15 years. That supply profile, the bank said, underpins demand from global pension and insurance investors seeking long-duration credit exposure.
On the durability of the trend, Citi observed that global investors pursuing long-duration credit have few scalable alternatives, a factor it described as reinforcing ‘‘the structural barriers to a widespread rotation away from U.S. assets."
The note acknowledged tensions elsewhere in the market, including recent investor scrutiny of rising debt at certain companies. As an example, Citigroup cited concern about debt growth at Oracle tied to the company’s plans to fund large-scale AI infrastructure expansion.
Clear summary
Citigroup reports sustained foreign demand for U.S. investment-grade corporate bonds over a 15-month span, driven by a shift into TMT-sector debt and long-dated maturities and away from financials, with notable inflows from several countries and positive rating actions for companies linked to AI infrastructure buildouts.
Key points
- Foreign investors increased TMT allocations to 26.1% in 2026 from 17.1% in 2025 - this affects technology-related corporate financing and credit markets.
- Allocation to financial-sector debt fell to 39% from 53.8% - impacting banks and financial issuers' demand base.
- Long-dated bond purchases (15+ years) rose to 44.1% of foreign purchases in 2026 from 23.7% in 2025 - significant for issuers and long-duration investors such as pension funds and insurers.
Risks and uncertainties
- Elevated corporate debt at individual companies - for example, investor scrutiny over rising debt at Oracle tied to AI infrastructure spending - presents credit risk for affected issuers and their bondholders.
- Concentration in U.S. top-rated, long-dated issuance - with U.S. companies comprising most of the $11.6 trillion stock of top-rated corporate bonds and issuing the bulk of 15+ year maturities - may leave global investors exposed if market dynamics shift.
- Regulatory changes can alter demand patterns, as illustrated by a 19.4% increase in Hong Kong holdings after policy adjustments, introducing policy-related flow volatility for bond markets.