April 28 (Reuters) - Foreign demand for U.S. investment-grade corporate bonds has remained strong for 15 consecutive months, according to Citigroup, as overseas investors rotate into technology, media and telecom (TMT) debt, as well as longer maturities, while moving away from financial bonds.
This shift stands in contrast to recent concerns about rising debt levels at companies like Oracle (ORCL.N), opens new tab, which faced investor scrutiny over its funding plans for massive AI infrastructure expansion.
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," Citigroup said in a note dated April 27.
Foreign investors increased their share of purchases of TMT corporates to 26.1% in 2026 from 17.1% in 2025, while reducing exposure to financial debt to 39% from 53.8%, the Wall Street brokerage said.
The brokerage said U.S. corporates saw the largest inflows since February 2025 from Canada, Japan, Norway, Taiwan, Kuwait and Hong Kong, with Hong Kong holdings up 19.4% after regulatory changes.
Demand for bonds with maturities over 15 years rose to 44.1% of total purchases in 2026 from 23.7% in 2025, Citi noted.
The brokerage highlighted positive rating actions for American Tower (AMT.N), opens new tab, Analog Devices (ADI.O), opens new tab, Keysight Technologies (KEYS.N), opens new tab and Cadence Design Systems (CDNS.O), opens new tab, citing improved credit profiles due to AI infrastructure buildout.
Global investors seeking long-duration credit exposure have no viable alternatives at scale, reinforcing the structural barriers to a widespread rotation away from U.S. assets," Citigroup noted.
According to the brokerage, U.S. companies account for most of the $11.6 trillion in top-rated corporate bonds in the U.S. and Europe, and issue the bulk of bonds maturing in over 15 years, highlighting their strong position in long-term debt and their popularity with global pension and insurance investors.