CoreWeave Bond Yield Tops 16% as AI Debt Gets Costlier — SkimNews
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- CoreWeave’s 2032 bond with a 9.625% coupon yielded more than 16%; Deutsche Bank reported that its five-year CDS topped 1,289 basis points Thursday, above October’s peak, before easing 8% Friday to around 1,155.
- Christopher Wood of Jefferies said the most plausible end to the AI capex arms race is that the “credit card will be taken away”; that outcome is not happening yet, as political hurdles under Democratic governors and a Democratic-controlled Congress have spooked credit markets, even as Kevin Hassett expects data-center growth to continue despite Democrats’ big election wins.
- Gina Hinojosa said she is not opposed to data centers but wants a Texas moratorium until the legislature passes protections for communities; Goldman Sachs estimated that moratoriums could affect 45% of planned U.S. capacity, with a large amount in Texas.
- Nvidia’s CDS rose 76% in the past month, versus 49% for Broadcom and 44% for Amazon.com, although Nvidia’s roughly 139-basis-point spread remained below Oracle’s 298 and CoreWeave’s 1,100. The increases show investors demanding more default protection and imply higher financing costs down the line.
- Goldman Sachs tallied five AI bond deals totaling $67 billion since October 29, putting this year’s hyperscaler debt issuance at $296 billion; it forecasts $440 billion next year plus $300 billion in project-level investment-grade and high-yield debt.
- Hyperscalers collectively reported negative free cash flow in the third quarter as capital spending exceeded operating cash flow; Goldman Sachs identified delayed monetization and growing purchase commitments as key risks to more debt issuance, subject to market conditions.
- Bank of America estimated AI-related credit issuance will rise 31% from 2026 to 2027 to $685 billion, then fall 23% to $531 billion in 2028; it identified a potential Blue Wave slowdown in infrastructure projects, which would reduce capital needs and debt-market funding, as downside.
Why it matters: CoreWeave’s roughly 1,100-basis-point CDS versus Nvidia’s 139 shows the sharpest debt-market stress is at a neocloud, while hyperscalers’ negative Q3 free cash flow shows capex is outrunning operating cash. Goldman still forecasts $440 billion of issuance next year, placing continued expansion alongside higher financing costs.
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