Governments in rich countries are set to sell a record amount of bonds this year in an increasingly risky environment, while a small number of companies plan to borrow heavily to fund the “enormous” cost of building AI capacity, the Organization for Economic Cooperation and Development said Wednesday.
In its annual report on debt issuance, the OECD said rich-country governments led by the U.S. will have to sell $14.5 trillion in bonds just to replace securities that are maturing, a process known as refinancing. New borrowing will likely bring total issuance to around $18 trillion, an increase of $1 trillion from last year, and a new record.
The increase in refinancing needs partly reflects a shift to selling bonds with shorter maturities, a response to the increased cost of selling longer-dated securities as borrowing surged during the Covid-19 pandemic and in subsequent years.
However, that shift to shorter maturities brings risks. The more often outstanding bonds need to be replaced with new issues, the more vulnerable the government is to a shock that leads investors to temporarily withdraw or demand sharply higher compensation to lend.
“The risk of refinancing may be high, especially in a geopolitical context with a lot of variability,” said Carmine Di Noia, the OECD’s director for financial affairs.
Yields on government bonds have risen sharply since the U.S. and Israel attacked Iran, a move that would increase the cost of refinancing if sustained.
According to the OECD’s figures, the U.S. faces the largest refinancing requirement among its membership, with bond sales equivalent to 31% of gross domestic product in 2025. Japan had the next highest requirement, at 25%, while Italy had the largest in Europe at 16.8%.
The U.S. accounts for an increasing share of total refinancing needs. It was responsible for 70% in 2025, up from 57% in 2020 and just 35% in 2007, the year before the global financial crisis struck.
New borrowing will likely bring total issuance to $18.3 trillion, an increase of more than $1 trillion from last year, and a new record. Governments from developing economies are expected to sell $3.6 trillion in bonds, up from $3.4 trillion last year.
Despite the rapid rise in sales amid increased trade disputes and international conflict, bond markets are “showing few signs of strain,” Di Noia said.
But that could change.
“The resilience debt markets have shown in the face of major pressures should not be taken for granted,” he said. “It rests on a foundation of rigorous monetary policy frameworks, serious commitments to sound fiscal policy, and trust in the integrity of the institutions governing these markets.”
The OECD also expects bond sales by businesses to reach a record high of $6.9 trillion this year, up from $6.8 trillion last year and $4.8 trillion in 2019.
“Given the scale of capital expenditure required to finance the expansion of AI, corporate borrowing needs are expected to continue increasing substantially,” the Paris-based research body said.
That surge in AI-related borrowing could take the corporate bond markets into uncharted territory, with degrees of concentration similar to those seen in equity markets over recent years.
The OECD estimates that nine “hyperscalers” alone are planning capital expenditures of $4.1 trillion between 2026 and 2030, or 36% more than total capital expenditure by all non-financial U.S. companies in 2025.
If half of those investments were financed through bond markets, the OECD calculates the nine would account for issuance of bonds equivalent to 15% of average annual sales by all non-financial businesses globally in the years 2020 to 2025.
“These developments may be setting corporate debt markets on course to become more equity-like,” the OECD said. “Combined with the enormous AI-related financing needs of other sectors, from energy providers to construction companies, AI financing is set to transform these markets.”
Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Paul Hannon is economics editor for Dow Jones Newswires in London. Paul rejoined Newswires after a decade at The Wall Street Journal, where he was an editor for central banks and reported on the impact of the Covid-19 pandemic on the global economy. https://www.wsj.com/economy/global/oecd-sees-rising-refinancing-risk-as-bond-sales-surge-448ff986?mod=global_news_article_pos3
2026NowNews 