Reverse Yankees: how the US corporate sector is reshaping the European bond market

The European bond market is currently undergoing a remarkable development: US companies are raising capital on a large scale in euros, British pounds, and Swiss francs. The focus is particularly on US hyperscalers, which, since last year, have been issuing bonds denominated in currencies other than their own to finance their extensive investments, for example in data centres and artificial intelligence.

Such foreign-currency bonds issued by American issuers are known in technical jargon as reverse Yankees or reverse Yankee bonds. This term refers to bonds issued by US companies not in US dollars but, for example, in euros. The term is the counterpart to the classic Yankee bond: here, unlike the case where a non-US company raises capital on the US bond market, a US company raises funds outside its home market through a reverse Yankee.

While this market segment is not new, the issue volume, the structure of issuers, and its strategic importance have grown in significance in recent years. In this article, we analyse how the market for reverse Yankees has developed in comparison with the broader euro investment-grade corporate bond market (EUR-IG market), and what significance recent developments hold from the perspective of issuers and investors.

Reverse Yankee bonds are gaining market share

According to the latest surveys, the issue volume of reverse Yankees in the EUR-IG market amounted to EUR 122bn in the first three quarters of 2026. In the third quarter alone – which typically experiences lower issue volumes for reasons of seasonality – bonds totalling about EUR 30bn were issued.

However, the trend in market share is more telling than the absolute issue volume. Measured against the total volume of new issues in the EUR-IG market, reverse Yankees have accounted for 16.4% in the year to date. This continues the strong trend seen in the previous year, when the share stood at 19.0%. In 2024 and 2023, the figures had been significantly lower at 12.3% and 8.7%, respectively.

According to the latest surveys, the issue volume of reverse Yankees in the EUR-IG market amounted to EUR 122bn in the first three quarters of 2026. In the third quarter alone – which typically experiences lower issue volumes for reasons of seasonality – bonds totalling about EUR 30bn were issued.

However, the trend in market share is more telling than the absolute issue volume. Measured against the total volume of new issues in the EUR-IG market, reverse Yankees have accounted for 16.4% in the year to date. This continues the strong trend seen in the previous year, when the share stood at 19.0%. In 2024 and 2023, the figures had been significantly lower at 12.3% and 8.7%, respectively.

Issue volume of reverse Yankee bonds (left scale: overall market; right scale: non-financials)

Source: Bloomberg, data as of 30 September 2026; own illustration

Hyperscalers are driving the trend, but they are not alone

This trend is particularly pronounced when it comes to non-financial companies, i.e. excluding banks and insurance companies. In the year to date, a total of about EUR 91bn worth of reverse Yankees has been issued. This represents 18.3% of the total volume of new issues on the EUR-IG market for non-financial companies.

Here, too, the trend of previous years is confirmed: while the share reached as much as 18.2% in the previous year, it stood at 14.4% in 2024 and at just 10.1% in 2023. US hyperscalers have recently made a significant contribution, issuing reverse Yankees bonds in the total amount of EUR 23.5bn this year. Of this, EUR 9bn came from Google and EUR 14.5bn from Amazon. However, the data shows that this trend is not solely attributable to the hyperscalers’ high financing requirements. Issuers from other sectors are also increasingly using the European capital market as a source of funding. In the banking sector, issuers over the course of the year have included Goldman Sachs, Morgan Stanley, and JPMorgan. In addition, well-known companies from the communications, utilities, and consumer goods sectors, such as AT&T, NextEra Energy, and Uber, also resorted to the European bond market.

Largest reverse Yankee issuers in the EUR-IG market 2026
(Top 10)

Source: Bloomberg, data as of 30 September 2026; own illustration

Why US companies issue reverse Yankee bonds

There are many reasons for issuing debt on the European bond market. One obvious reason is potential financing advantages. In addition to the general level of interest rates – which is currently higher in the USA than in Europe – credit spreads, i.e. the risk premiums demanded by investors, play a particularly decisive role in determining a company’s actual financing costs.

Taking Alphabet as an example, it is clear that the company’s euro-denominated bonds (blue line) command lower credit spreads than corresponding US dollar-denominated bonds (red line) across much of the maturity structure. At first glance, this suggests more favourable financing terms. Whether this results in a financing advantage ultimately depends on the maturity, the rating, investor demand, the interest rate environment, and the costs of any currency hedging via cross-currency swaps.

Through a EUR/USD cross-currency swap, issuers can exchange the proceeds from a euro-denominated bond for US dollars and, in economic terms, convert the euro liability into a US dollar liability. The so-called cross-currency basis reflects the cost of this currency conversion. A negative basis means that demand for US dollar funding is higher than that for euro funding, making it more expensive to raise dollars via the swap market. The EUR/USD basis has recovered significantly in recent years and is now trading just below the zero line. As a result, the cost of currency hedging is now considerably lower than it was a few years ago, which increases the attractiveness of euro-denominated issues for issuers.

Source: Bloomberg, data as of 15 October 2026; own illustration

Currency and cash flow matching is another reason. For companies with sales in Europe, financing in euros can be attractive if the funds raised are also used within the Eurozone. In this case, interest and principal repayments can be met directly from euro cash flows. The natural alignment of liabilities and cash flows reduces currency risk and makes financing easier to plan.

A third reason is the diversification of funding sources. Companies with high capital requirements often do not wish to rely exclusively on the US dollar market for their funding. By issuing in euros, they can broaden their investor base and strengthen their presence on the European capital market. That said, financing in euros is not necessarily cheaper than a comparable issue in US dollars. Market receptiveness and reliable, repeatable access to capital can be just as crucial.

This is currently particularly evident among US hyperscalers, which are investing billions in AI infrastructure. Given the sharp rise in capital requirements, international capital markets are becoming increasingly important as a source of funding. Reverse Yankees not only give these companies access to an additional investor base but also allow them to link European liabilities to European cash flows. The high issue volume in recent quarters underlines that, for many US companies, the European bond market has long been more than just an opportunistic financing alternative.

Currency and cash flow matching is another reason. For companies with sales in Europe, financing in euros can be attractive if the funds raised are also used within the Eurozone. In this case, interest and principal repayments can be met directly from euro cash flows. The natural alignment of liabilities and cash flows reduces currency risk and makes financing easier to plan.

A third reason is the diversification of funding sources. Companies with high capital requirements often do not wish to rely exclusively on the US dollar market for their funding. By issuing in euros, they can broaden their investor base and strengthen their presence on the European capital market. That said, financing in euros is not necessarily cheaper than a comparable issue in US dollars. Market receptiveness and reliable, repeatable access to capital can be just as crucial.

This is currently particularly evident among US hyperscalers, which are investing billions in AI infrastructure. Given the sharp rise in capital requirements, international capital markets are becoming increasingly important as a source of funding. Reverse Yankees not only give these companies access to an additional investor base but also allow them to link European liabilities to European cash flows. The high issue volume in recent quarters underlines that, for many US companies, the European bond market has long been more than just an opportunistic financing alternative.

What does this mean for European issuers…

For European issuers, this development presents both opportunities and challenges. On the one hand, international borrowers enhance the depth, liquidity, and global significance of the European corporate bond market. On the other hand, every new issue competes for available investor capital. Large-volume transactions by established US companies can divert attention away from smaller European issuers. Also, new reverse Yankees create additional benchmarks for existing bonds. If new issues are offered with attractive spreads or new issue premiums, this can lead to valuation adjustments for comparable European bonds.

However, no widespread crowding-out effect has been observed to date. Despite the high issue volume of reverse Yankee bonds, order books for European issuers have remained well-filled recently. Even smaller or unrated companies have been able to successfully place bonds. The stable demand suggests that the European bond market has so far been able to absorb the growing supply effectively.

…and for investors?

For investors, the investment universe is expanding to include issuers, sectors, and credit profiles that have traditionally been less well represented in the European market. This applies in particular to technology companies with good ratings, as can currently be seen quite clearly: as the technology sector is significantly under-represented in European corporate bond indices, issues from major hyperscalers can contribute to better sector diversification within a portfolio. Also, reverse Yankees facilitate investment in US companies without having to directly assume the exchange rate and interest rate risk associated with a dollar-denominated bond.

That being said, this trend also brings new challenges. As hyperscalers issue more bonds, they are gaining weight both in market indices and, potentially, in investors’ portfolios. As a result, the performance of the US economy and the success of extensive AI investments may exert a greater influence on corporate bond investors. It should also be noted that an issuer’s profile and the attractiveness of a bond are not the same thing. For investors, valuation, maturity, capital structure, leverage ratio, and the relationship between the offered spread and the actual credit risk remain crucial analytical criteria.

 

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