Big Tech’s deep dive into AI debt is hitting a $3.6 trillion refinancing wall across the US and global system, as old cheap money turns into expensive refinancing pressures.
The technology sector has more than $330 billion of high-yield loans, leveraged loans, and BDC-related software and technology debt that must mature through 2028. This pool was built in a low-interest era. Now the rates are higher, and the accounts are quickly turning around.
Hunk lands in 2028 alone. About $142 billion is due that year, nearly three times the 2026 level. Within that 2028 wave, roughly $65 billion is in high-yield bonds and about $77 billion in leveraged loans. Most of this debt was issued when interest rates were near zero during the pandemic.
That setting is gone. Many companies are already arranging refinancing steps as early as the second half of this year, and the sector is heading into a higher interest rate environment that will reset financing costs across technology balance sheets.
Tech companies begin refinancing pandemic-era debt
The pressure to refinance is not small. More than $330 billion of technology-related debt will mature through 2028, and the 2028 high of $142 billion stands out as a major pressure point. Companies that held very cheap cash during the pandemic now face much higher borrowing costs when they roll over debt.
Timing is important. The refinancing wave is expected to begin in the second half of this year, which means the repricing cycle is not years away. I’ve already started.
The technology sector, especially software-intensive borrowers tied to high-yield bonds and leveraged loans, is shifting from near-zero interest rate financing to a more stringent credit regime where each renewal comes at a higher cost. This shift is not isolated. It lies within a broader global debt squeeze that is hitting corporate and sovereign borrowers at the same time.
Global debt pressures rise with the International Monetary Fund announcing the global GDP debt burden at 99% and the US fiscal path rising towards 142%.
The International Monetary Fund has drawn a broader line of pressure across global financial resources. Global public debt is expected to reach 99% of global GDP by 2028, with scenarios pushing it to 121% under stress within three years.
The United States remains a central case, with a national debt of $39 trillion and a deficit expected to reach about 7.5% of GDP after the brief improvement fades.
US debt is on track to exceed 125% of GDP this year, and could reach 142% by 2031. Only the adjustment required to stabilize this path, not reduce it, will require about 4% of GDP under fiscal tightening. Markets are already changing.
The premium for US Treasuries relative to other advanced debt is shrinking. “These are signs that markets are no longer as optimistic and tolerant as they were in the past,” an IMF financial official said. “This cannot wait forever.”
The financial gap also widened by about one percentage point compared to pre-pandemic levels. The IMF linked this to policy choices, not short-term cycles, citing rising spending and falling revenues as the primary driver.
Real interest rates are now about six percentage points higher than pre-pandemic levels, increasing pressure on each layer of outstanding debt.
Energy policy also exacerbates tensions. The International Monetary Fund has warned that broad subsidies distort pricing and put pressure on budgets, with one official saying: “They distort price signals, are fiscally costly, regressive, and are difficult to reverse.”
When many countries protect consumers, the rest absorb the adjustment, with spillover effects that can compound price shocks for those who do not use subsidies.
Financial monitorIra Dabla Norris noted that governments have become more conservative than during the 2022 energy crisis, but said fiscal space is now tighter, making old-style support much more expensive.
