Foreign investors favor tech-linked U.S. corporate bonds over financial debt

Foreign investors kept buying U.S. investment-grade corporate bonds for a 15th straight month, but Citigroup says the money is moving with more purpose. Overseas buyers have been rotating into technology, media and telecom debt, as well as longer maturities, while trimming exposure to financial bonds, a pattern that suggests global capital still trusts U.S. credit, but is choosing the parts of corporate America most tied to AI, communications and durable growth.

The numbers show how sharp that shift has become. Citi said foreign investors lifted their share of purchases in TMT corporates to 26.1% in 2026 from 17.1% in 2025, while their exposure to financial debt fell to 39% from 53.8%. Bonds with maturities longer than 15 years made up 44.1% of total purchases this year, up from 23.7% a year earlier, a sign that foreign buyers are still willing to lock up capital for decades in U.S. credit rather than chase shorter-term returns elsewhere.

The buying was broad-based, with U.S. corporates drawing the largest inflows since February 2025 from Canada, Japan, Norway, Taiwan, Kuwait and Hong Kong. Citi said Hong Kong holdings rose 19.4% after regulatory changes. The bank also flagged positive rating actions for American Tower, Analog Devices, Keysight Technologies and Cadence Design Systems, tying the upgrades to improved credit profiles as AI infrastructure buildout reshapes demand for their businesses.

That confidence is not blind. Oracle’s financing plan has become a reminder that the AI boom is also a debt story, and one that investors are watching closely. In February, Oracle said it expected to raise $45 billion to $50 billion in gross cash proceeds during calendar 2026 through a balanced mix of debt and equity, including a one-time issuance of investment-grade senior unsecured bonds early in the year, to expand Oracle Cloud Infrastructure for customers including AMD, Meta, NVIDIA, OpenAI, TikTok and xAI.

Still, Citigroup’s broader message is that U.S. corporate credit remains a core destination for foreign portfolios because the market is deep, liquid and unusually rich in top-rated issuers. Citi said U.S. companies account for most of the $11.6 trillion in top-rated corporate bonds available across the U.S. and Europe, giving global pension funds and insurers a scale of opportunity they cannot easily replicate elsewhere.