BlackRock Bond CIO: AI High-Quality Bonds Are More Attractive Than U.S. Treasuries

According to a report by the Korean News Agency, Rick Reed, Chief Investment Officer of Global Bonds at BlackRock, stated that the scale of debt financing for the recent expansion of artificial intelligence infrastructure is unprecedented, and related bonds are more attractive than U.S. long-term government bonds. In an interview with Bloomberg Television, he mentioned that the scale of financing in the bond and stock markets is unprecedented, and this is the most attractive investment period he has ever experienced.

Rick Reed focuses on high-quality bonds issued for financing GPUs, data centers, and other AI infrastructure, and noted that the scale of newly issued corporate bonds is large, making interest rate conditions better than before. Although the yield on U.S. 10-year government bonds exceeds 5%, it has been marginalized by other market products, with government bonds increasingly viewed as a benchmark for measuring the stock market. Investors can obtain an interest rate of about 7% by purchasing short-term single A-rated bonds, thereby avoiding the duration risk of long-term government bonds.

He also prefers secured bonds issued by high-quality companies or assets that can generate cash flow, and believes that the valuations of stocks in the semiconductor and computing sectors are at reasonable levels. Reports indicate that hyperscale data center operators are issuing the largest corporate bonds in history, raising hundreds of billions of dollars, absorbing funds that would have otherwise flowed into government bonds, and becoming one of the main reasons for pushing up U.S. government bond yields. The scale of high-quality financing related to AI globally has exceeded $300 billion this year, approximately three times that of the entire last year.