Asks how the market is absorbing massive tech financing needs for AI buildout.
speaker2
Johnny Fine
Market absorbing financing incredibly well. Oracle's $25B debt had largest order book in history. Alphabet saw robust demand across dollar, sterling, and Swiss franc markets.
Asks who is buying all this debt.
speaker2
Johnny Fine
Incredibly broad array of global institutional investors. Oracle deal had ~3000 investor line items.
Asks if market draws line on who can issue or balance sheet requirements.
speaker2
Johnny Fine
Capital markets open to full range of investment grade borrowers. 100-year sterling is niche with narrow Venn diagram of issuers and investors.
Notes capital needs seem endless, free cash flow declining. Asks if he encourages companies to borrow sooner given favorable conditions.
speaker2
Johnny Fine
Companies will plan over year, use various levers to fund capex. Capex announcements recently revised up by $120-150B.
Notes nobody seems concerned about companies going to negative free cash flow.
speaker2
Johnny Fine
No concern because it's short-term build of extraordinary infrastructure - largest in human history.
Asks if he remains dovish on rates and if 10-year could go into threes.
speaker2
Johnny Fine
Yes, expects 3.5% in 10-year later this year. Expects four Fed cuts, back-end loaded, first cut in June.