Reverse Yankee supply will come mostly from hyperscalers
The desk anticipates significant Reverse Yankee issuance, predominantly driven by hyperscalers, as they are expected to account for approximately €60 billion in 2027, up from €31 billion in 2026. This aligns with the overall forecast of €100 billion in Reverse Yankee supply for 2027, which remains constant from the previous year. Per the full note from ING, the deteriorating economics for U.S. issuers funding in euros, while less appealing, do not overshadow the strong demand from the tech sector. Therefore, while the supply from non-hyperscaler borrowers drops, the hyperscaler dynamics are likely to support continued elevated issuance levels.
What the desk is arguing
The desk expects that Reverse Yankee issuance will continue to thrive, mainly due to the robust participation of technology hyperscalers. Per the full note from ING, they predict this segment alone will contribute €60 billion to 2027 issuance, illustrating the strong demand dynamics at play despite some economic headwinds.
The overall forecast from ING indicates another €100 billion in total Reverse Yankee issuance for 2027, similar to 2026 levels. This stability is significant given the changing economics; the traditional advantages for U.S. firms issuing in euros have diminished, making the funding calculus less favorable for many corporates.
Where it sits in our coverage
Our current consensus target for EUR/USD stands at 1.075, with forecasts from specific firms including: - jpmorgan: 1.10 (Mar-26) - bofa: 1.04 (Mar-26)
The desk's bullish view aligns more closely with jpmorgan's higher target, reflecting expectations of sustained issuance amidst economic fluctuations, while bofa's more conservative outlook highlights potential vulnerabilities in the funding landscape.
How other firms see it
There is a growing consensus among firms like jpmorgan and credit suisse that demand for Reverse Yankee issuance will remain steady, driven by tech-sector needs. In contrast, firms like bofa are less optimistic, suggesting a potential slowdown in issuance.
As the situation develops, keep an eye on the USD/EUR dynamics and the upcoming corporate earnings releases, as these may inform investor sentiment and funding strategies moving forward.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Hyperscalers predicted to dominate Reverse Yankee issuance in 2027
- 02Overall forecast remains stable at €100 billion
- 03Deteriorating issuance economics may limit non-hyperscaler participation
- 04Supply concentrated in the tech sector points to persistent demand
Market implications
Traders should watch for any shifts in the EUR/USD exchange rate, especially as companies increasingly turn to the euro for funding. Positions may adjust based on the reaction to upcoming corporate earnings and issuance announcements.
Risks to this view
A significant rise in U.S. interest rates or a narrowing of the USD/EUR spread could prompt a reassessment among issuers, potentially leading to reduced Reverse Yankee issuance. Should the cost of capital in euros become less attractive, this could trigger a shift back towards dollar funding.
Articles Reverse Yankee supply will come mostly from hyperscalers Published 10:15 Credit Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download 2027 is set to be another heavy year for issuance across currencies and products, even if supply moderates somewhat from 2026 levels in many segments. Hyperscalers and the wider technology sector will remain key drivers of funding activity and are among the largest contributors to our overall supply forecasts Timothy Rahill and Jeroen van den Broek We expect hyperscalers alone to account for around €60bn of Reverse Yankee issuance in 2027 The key question for 2027 is whether Reverse Yankee supply can remain as convincing as it has been in recent years. The economics for US issuers looking to fund in euros and swap proceeds back into dollars have deteriorated markedly, with much of the historical funding advantage having evaporated.
In many cases, the maths is now far less compelling on an issuer-by-issuer basis. However, the hyperscaler story remains difficult to ignore. We expect hyperscalers alone to account for around €60bn of Reverse Yankee issuance in 2027, up sharply from the roughly €31bn issued in euros during 2026.
As a result, we continue to expect elevated Reverse Yankee supply, albeit increasingly concentrated within the technology sector. Overall, we forecast another €100bn of Reverse Yankee issuance in 2027, matching that of 2026. €100bn Reverse Yankee supply forecast for 2027 Importantly, this leaves only around €40bn of issuance from non-hyperscaler borrowers, a notable decline on what we saw in 2026. The decline reflects the reduced cost-saving incentive for US corporates to issue in euros and swap back to dollars.
XCCY & USD EUR spread differential 10yr Source: ING, IHS Markit "> Source: ING, IHS Markit Reverse Yankee issuance has historically been closely linked to both USD and EUR corporate supply. On average, it has represented around 10-11% of US corporate issuance and 20-21% of EUR corporate issuance. For 2027, this increases marginally up to 12% and 23% respectively on the back of the larger hyperscaler and tech issuance.
This also suggests that continued strength in overall corporate funding volumes should still provide a supportive backdrop, even if the currency economics become less attractive. Reverse Yankee supply Source: ING, Dealogic "> Source: ING, Dealogic USD Hyperscalers EUR Credit Bonds Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.
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