MS AI Debt Financing Tracker Heat Advisory

Global Credit Strategy & Securitized Products Morgan Stanley & Co. LLC Global Idea

Fernanda Lima Research Strategist

AI Debt Financing Tracker: Heat Carolyn L Campbell Strategist

Advisory Vishwanath Tirupattur Strategist

Vishwas Patkar June brought a heat wave to the credit markets and overtook Strategist April as busiest month YTD with $77bn of AI-related supply. We James Egan Strategist think sentiment shifted during the past month, with investors

turning incrementally more cautious on potential thematic risks. Morgan Stanley & Co. International plc+

2027 hyperscaler capex estimates to be revised higher, and we Aron Becker Strategist expect credit markets to continue to play a significant role in

financing the ongoing investment cycle. Morgan Stanley & Co. LLC

Catherine Liu Key Takeaways Strategist

In corporate credit, issuance broadened out beyond hyperscalers to other Eva C Baurmeister Strategist megacaps that are AI-related. Deals surprised the market and have widened since pricing. We’re seeing meaningful spread decompression in hyperscalers/AI-related Christina C Sigler names vs. the rest of the US IG market. Strategist

In securitized credit, after a quiet period, ABS bonds were well bid when issuance Morgan Stanley & Co. International plc+ resumed. Issuers are gravitating towards AAA paper to crowd in demand. CMBS Jonathan Loke issuance has been strong, but pricing less so. Strategist

2027 hyperscaler capex revised higher: Combined capex is now projected to be > Morgan Stanley Asia Limited+ $1.25tn. We continue to expect credit markets to play a significant role in Kelvin Pang financing the proposed capex. Thus, we expect the current pace of issuance to Strategist continue through 2H26-27. Further, we expect this supply to be more concentrated in the USD market, given market capacity and recent performance Morgan Stanley & Co. LLC

of non-USD deals. Lindsay A Tyler Credit Analyst Fundamental tiering across players to gain more traction: ORCL’s downgrade to BBB- by S&P came sooner than expected. Combined FCF estimates continue to Kate Konetzke, CFA, CPA GVAT Strategist be revised lower. Reported leverage metrics remain healthy, but we’re monitoring

rising off-balance sheet commitments.

Shorter duration and amortizing structures: We think sentiment shifted during the past month, with investors turning incrementally more cautious on potential Morgan Stanley does and seeks to do business with thematic risks. In HY, secured data center bonds generally outperformed companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of hyperscaler/neocloud bonds in the sell-off. Chip financing deals are emerging as interest that could affect the objectivity of Morgan Stanley an option to diversify away from long-tenor asset risk, given their shorter Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment duration and fully amortizing structures. decision. For analyst certification and other important disclosures, The 2026 Extel Global Fixed Income Poll is open and your participation matters a refer to the Disclosure Section, located at the end of this report. great deal to us. If you have found this monthly tracker or any of our AI-related += Analysts employed by non-U.S. affiliates are not registered research helpful, we would greatly appreciate your support. We are running in many with FINRA, may not be associated persons of the member and may not be subject to FINRA restrictions on categories across Corporate Credit, Consumer ABS and CMBS. Click here to request communications with a subject company, public appearances your ballot, and please rate us five stars. Thank you! and trading securities held by a research analyst account.

Todd Castagno, CFA, CPA This deck tracks the accelerating AI-related financing cycle, highlighting surging GVAT Strategist hyperscaler capex, expanding debt issuance across different asset classes (IG/HY/ Raquel Kanner Securitized Credit) and currencies. If you'd like underlying data for this report, please Strategist

Morgan Stanley India Company Private Limited+

Morgan Stanley & Co. International plc+

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