Citadel Securities has launched two new AI-linked corporate bond baskets – one containing 10-year maturities and another holding 30-year debt issued by tech giants Microsoft, Amazon, Alphabet and Meta – according to a report by Bloomberg.
The new offerings giving hedge funds and cross-asset investors a faster way to trade exposure to the hyperscaler AI build-out.
The market-making firm said the instruments allow investors to express macro views or hedge aggregate risk tied to the tech giants’ unprecedented AI-related capex, which has driven record levels of bond issuance. Daily trading volumes in individual credits already average around $1bn, and Citadel Securities expects liquidity to deepen as debt stacks continue to grow.
Sam Berberian, global head of credit trading, said the baskets are designed to provide a scalable, liquid alternative to trading multiple single-name bonds with differing terms and structures. The launch comes as AI-linked debt has become the largest segment of the US investment-grade market and as hedge funds increase their use of credit derivatives to hedge default risk across the tech complex.
Citadel Securities already operates similar basket products in financials and is positioning the new AI theme as a key hedging and trading tool for macro and relative-value strategies over the next several years, as hyperscalers continue to fund AI expansion through the bond market.
