Record takeovers and massive debt revive fears of a credit bubble
A new cycle of growth driven by Artificial intelligence (AI)? Or a reissue of the old corporate debt excesses? The return of the greats corporate operations to Wall Street has reopened a debate that seemed outdated since the era of easy money: the systemic risk associated with massive debt in a context of interest rates still elevated.
The takeover bid hostile from Paramount on Warner Bros Discoveryvalued at 77.9 billion dollars, of which 54 billion are debt, has reactivated the debate. Also the counteroffer from Netflix, which has responded with a more ambitious proposal, leveraged with another 59 billion. Both operations would be among the largest of the decadeand in both, the cash payment is marginal: the financial muscle is borrowed.
Everything is being bought with debt
According to the latest global manager survey conducted by Bank of America, the main fear by 2026 it is not a technological bubblenot even a generalized stock market correction. It’s the debt. 26% of respondents identify excess leverage as the biggest risk to markets, far ahead of fear of technological overvaluations (9%). The concern is no longer with asset prices, but with the sustainability of balance sheets.
And it’s no wonder. It’s not just the case of Warner. This year has been marked by large-scale leveraged corporate operations. Another of the most striking is the attempted delisting of Electronic Arts, valued at 55 billion, in which funds such as Silver Lake, Affinity Partners and the Saudi sovereign wealth fund. It would be the largest leveraged buyout in history. Part of that financing, about 20 billion, would also come in the form of debt.
26% of respondents identify excess leverage as the biggest risk to markets
The phenomenon is not marginal. According to Reuters and Bloombergthe global volume of mergers and acquisitions It is already approaching 4.5 trillion dollars in 2025, with operations exceeding 10 billion euros being executed at a record pace.
Another relevant agreement in this new wave of credit-financed megamergers is the union between Union Pacific and Norfolk Southernvalued at more than $80 billion. This is an operation that confirms that leverage is no longer exclusive to the technology or entertainment sector. Even mature, traditionally funded industries with internal flows, they are turning to massive debt to scale.
Another recent example is Broadcom, which closed the purchase of VMware for 69,000 million dollars. After the results presentation, the market focused not on revenues or profits, but on the balance sheet: specifically, the size of its debt. The shares fell 11% in a single day. Likewise, Oracle, which has raised debt to expand in AI, accumulates a decrease of more than 30% since Septemberwhile their CDS (non-payment insurance) have doubled in a month.
Historical leverage and shadow banking
“We are seeing a market where debt is once again the main driving force growth,” says Juan Carlos Ureta, executive president of Renta 4 Banco. Ureta points out that “large debt operations do not They only multiply the risk if something goes wrong; Furthermore, many no longer go through the traditional banking circuit.”
In fact, the data of the Financial Stability Board reveal that the so-called “non-bank credit” or “shadow banking” already moves more than 60 trillion dollars globally. In the United States, according to the same source, 70% of Corporate leverage already originates off balance sheet of the banks.
The warnings no longer come only from academic analysts, but from the very core of the financial system. Jamie DimonCEO of JP Morgan, has warned on several occasions that the explosive growth of the private credit constitutes “one of the biggest hidden risks of the system current financial situation”, due to its poor capacity to absorb losses in a stress scenario.
The consequence is twofold: on the one hand, more liquidity available for high-risk operations. On the other hand, less visibility and regulation over who really takes that risk. According to S&P Global, The volume of operations financed by debt has grown by 34% so far in 2025, with structures that are increasingly complex, aggressive and difficult to value.
More optimism in the stock market than in credit
Despite this background, the end of the year on the stock market is being positive. He End-of-year ‘rally’ continues, supported by expectations of rate moderation in 2026. But some voices in the market warn that the path will not be so simple. This is the case of Savita Subramanian, chief strategist of Bank of America, which has lowered its estimate for the S&P 500 at 7,100 points, well below the consensus, which places it above 7,500 points.
All in all, the equity market can continue to advance, but the debt corporate is starting to show signs of fatigue. Mergers multiply, money flows again, and managers celebrate the new technological cycle. But the dynamics that are being formed with excess credit, shadow banking and increased financing costs are reminiscent of stages that ended with abrupt adjustments.
Ureta sum up the moment with a warning: “We are in the early stages of a new financial regime, where AI, tokenization and digital assets are transforming the market… but excess debt always ends up having consequences.”
