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The Debt Behind the Buildout

The money is still coming, on harder terms. On October 26 Bank of America, Citi, Morgan Stanley and Blackstone committed $63 billion to a new vehicle. It will buy Broadcom’s custom chips and lease them to Anthropic from 2027. Broadcom, the seller, backs the residual value of the whole first-lien slice, so the senior lenders’ asset risk sits with the chipmaker. No pricing or term was disclosed.

Smaller borrowers pay more and for less time. Nebius signed a $3.5 billion one-year bridge loan with Citi, secured on substantially all its assets. Its rate rises a quarter-point every 90 days, up to 3.5 points over the benchmark. Its July loan, backed by deployed chips, ran to 2030 at 2.5 points.

Oracle, whose swaps have traded like junk, told investors it will raise no more than $20 billion of new debt and equity through fiscal 2030. Its leases are not included: $288 billion not yet begun. Data-centre securitisations reached $64.4 billion outstanding after $4.65 billion in the third quarter, Morningstar DBRS says.

No borrower has missed a payment.

New

5

The whole story4 chapters
The state of it — as of October 29, 2026
1,194bp
cost to insure CoreWeave’s debt for five years — a record
$635bn
AI-related debt issued in 2026, on Bank of America’s count
$650bn
of debt inside 14 circular AI financing deals, on the IMF’s count

Today

All new

Oracle Caps Its New Borrowing and Share Sales at $20 Billion Through 2030

Oracle told investors on October 28 that it will raise no more than $20 billion of new capital-markets funding over fiscal 2027–2030. It expects that to be about $10 billion of equity and $10 billion of gross debt, not counting refinancing. In June it had said it expected about $40 billion in fiscal 2027 alone. The cap does not cover data-centre leases or vendor financing. Its latest quarterly filing shows $125.3 billion of borrowings and $288 billion of leases not yet begun, mostly data centres. It targets net debt, leases and vendor financing included, below 3.5 times adjusted EBITDA in fiscal 2029.

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confirmed that growth will be self-funded beginning in FY29

— Oracle

Oracle’s Investor Day release, as reproduced by StockTitan. The same release forecasts positive free cash flow in the second half of fiscal 2028 and at least $30 billion in fiscal 2029. Free cash flow was minus $23.7 billion in fiscal 2026.

Not yet checked

Unverified: a forecast for fiscal 2029, which ends May 31, 2029. Oracle’s free cash flow was minus $23.7 billion in fiscal 2026 and minus $5.4 billion in June–August 2026.

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Data-Centre Securitisations Pass $64 Billion Outstanding

US data-centre securitisation issuers sold $4.65 billion of new asset-backed and commercial-mortgage-backed bonds in the third quarter of 2026, Morningstar DBRS reported on October 27. That takes outstanding data-centre securitised debt to $64.4 billion. Only the rating agency’s summary is public; the deal-level detail is not.

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Earlier this month

13
New

Four Banks and Blackstone Put $63 Billion Behind Anthropic's Broadcom Chips, With Broadcom Standing Behind the Senior Debt

Bank of America, Citi, Morgan Stanley and Blackstone announced a $63 billion financing on October 26 for a newly formed special-purpose vehicle. The vehicle will buy Broadcom’s custom AI accelerators and networking equipment and lease them to Anthropic, with deliveries from 2027. The three banks arrange the first-lien debt, and Blackstone is the sole provider of the committed second lien. Broadcom gives the vehicle residual-value support equal to the whole first-lien portion, so the chip supplier carries the senior lenders’ asset risk. No tenor, pricing or split between the liens was disclosed. The release does not say how this relates to the $35 billion Apollo–Blackstone platform set up in June.

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CoreWeave’s Swaps Ease From Their Record as Junk Buyers Wait Out the Midterms

The cost of insuring CoreWeave’s debt eased from its 15 October record. It was near 1,090 basis points at the close on 19 October, on Bloomberg data, and about 1,067 by 21 October, still up 30% in October; its unsecured bonds yielded about 15% (CNBC). CoreWeave has about $20.7 billion of debt due through 2030 and $14.9 billion after, against $5.5 billion of cash at the end of June. Credit-desk sources told CNBC that high-yield buyers are largely waiting until after the US midterm elections before taking new data-centre debt. Janus Henderson’s Seth Meyer said that ‘pausing makes sense’.

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SoftBank’s Default Swaps Reach Their Highest Since 2022

SoftBank Group’s five-year credit default swaps reached 432 basis points on 20 October, Bloomberg data show. That is their highest since early November 2022 and more than 130 points above any other major Japanese company. SoftBank borrowed $11.1 billion in September to complete its OpenAI investment. It is also weighing a purchase of Allied Universal. Bloomberg Intelligence’s Sharon Chen expects at least $6 billion of cash outflow in the year to March 2027 and says the acquisition would need fresh funding. That would move SoftBank’s loan-to-value ratio toward its self-imposed 25% ceiling.

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The Discount on Oracle’s Campus Loans Deepens, and Its Swaps Trade Like Junk

Some of the $18 billion of debt behind Oracle’s New Mexico campus, developed by Blue Owl, has recently sold at about 80 cents on the dollar. That is down from about 90 in September, two people familiar with the trades told the New York Times. Part of the $38 billion bank loan for two more Oracle campuses, in Texas and in Port Washington, Wisconsin, has traded around 90 or below, two traders said. The cost of insuring Oracle’s own debt for five years touched 300 basis points on 15 October and stood at 295 on 19 October, up 287% in a year (CNBC). S&P Global Market Intelligence likens that range to BB and B credit; Oracle is rated BBB−, the lowest investment grade. FactSet counts $118 billion of long-term debt and $39 billion of lease obligations. These are traders’ marks on anonymous trades, not losses or defaults.

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New

Nebius Borrows $3.5 Billion for a Year, at a Rate That Rises Every Quarter

Nebius, the GPU cloud provider, signed a $3.5 billion senior secured bridge loan with Citibank on October 17. It pays the floating benchmark rate plus 2.75 percentage points, and the margin steps up by a quarter-point every 90 days to 3.50. It matures on October 16, 2027, and can be repaid early without penalty. It is secured by substantially all the borrowers’ assets, including the shares of its operating subsidiaries, and carries a minimum-liquidity covenant. July’s $775 million facility was backed by deployed GPUs, ran to 2030 and cost 2.50 points over the benchmark.

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Anthropic Was Rated One Notch Below Investment Grade in June, It Emerges

Anthropic received a BB+ issuer rating from KBRA in June — one notch below investment grade — the Financial Times reported in October from documents it had seen. The rating covered about $4.4 billion of junior debt exposed to Anthropic’s own credit inside the $35 billion Apollo-led chip financing, which sold at about 8.5%; the rest was guaranteed by Broadcom, with the senior debt at 5.75%. KBRA rated on a risk score rather than a full financial model, from figures Anthropic chose to supply. Read through a summary of the FT’s report; the FT article itself was not readable.

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Nearly Half of This Year’s Data-Centre Bonds Are Rated Junk

Of about $80 billion of bonds sold this year to finance data centres, $37 billion is rated below investment grade, Forbes reported. That is more than four times the $8.6 billion of junk among 2025’s $36 billion (Barclays’ count). The 2026 junk bonds fund 16 projects backed by or leased to Amazon, Meta, Nvidia, Oracle, CoreWeave and Fluidstack. Their average yield rose to nearly 10% in the week to 16 October. Bonds behind data centres CoreWeave leases averaged 11%, against about 7% for BB+ debt. About $4 billion of CoreWeave’s own corporate debt traded below 80 cents.

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The Selloff Reaches Bonds Backed by the Biggest Tenants

Prices fell on project bonds whose rent comes from the largest technology companies. Debt of Beignet Investor, the vehicle funding Meta’s Hyperion campus, slipped from above par in early July to a little under 91 cents, the Financial Times reported; it yielded 6.6% at pricing in October 2025 and about 7.5% by 2 October, per Nasdaq Private Market. Bonds behind two Hut 8 projects fell to about 93 and 91 cents, and those of Blackstone-owned QTS’s Microsoft-leased Project Excalibur in Georgia below 87. No missed payment or default has been reported on any of them.

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CoreWeave's strength is improving every day. I'm optimistic. Their cost of capital is actually decreasing.

— Jensen Huang Mixed

Checked: mixed

Mixed. Over the longer run CoreWeave has won cheaper secured funding, including an investment-grade-rated loan against its GPUs. But on the day Nvidia’s chief spoke, the price of insuring its debt hit a record 1,194.5 basis points and its bonds yielded nearly 16%. On market prices, its cost of new borrowing was rising (ICE data via Bloomberg; CNBC).

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CoreWeave’s Bonds Fall to Distressed Prices, and Its Default Swaps Price Better-Than-Even Odds of Failure

CoreWeave’s bonds fell below 75 cents on the dollar on 14 October, a level usually read as distress, taking yields to nearly 16%; its 9.75% notes due 2031 had traded near 87 at the start of the month and 92 in August. The next day the cost of insuring its debt for five years reached a record 1,194.5 basis points intraday, on ICE data reported by Bloomberg — a price implying better than a 60% chance of default within five years. S&P Global Market Intelligence’s Gavan Nolan said spreads above 1,000 points generally signal distress, and that the question is not demand for CoreWeave’s capacity but whether its cash flow arrives. CoreWeave, whose GPU-backed loans helped create this market, has not missed a payment; a swap price is a mark, not a default.

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We are confident in our backlog which more than supports all of our debt obligations.

— Michael Intrator

Not yet checked

Unverified: a borrower’s account of its own credit, from a memo CNBC obtained as its bonds traded at distressed prices. Deutsche Bank puts the backlog above $100bn, about two-thirds with investment-grade customers. The test is whether CoreWeave meets its debt service.

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The IMF Counts $650 Billion of Debt Inside AI’s Circular Deals

The IMF’s October Global Financial Stability Report counted 14 public “circular financing” transactions since 2023 — deals in which AI firms invest in, lend to and buy from one another — carrying about $650 billion of debt, some of it in off-balance-sheet vehicles, alongside $300 billion of equity, against $1.4 trillion of promised future revenue. Stress at a company receiving the money, the Fund said, would lower revenue forecasts and weaken the value of that debt. It recommended limiting leverage in AI and private credit, including sectoral capital and concentration requirements on banks’ exposures. It is a recommendation, not a rule.

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Basel’s Bank Supervisors Note the Leverage in AI Financing, and Decide Nothing on It

The Basel Committee, the global standard-setter for bank regulation, said after its 28–29 September meeting that “the financial footprint of the AI ecosystem is also expanding rapidly, accompanied by greater use of leverage and increasingly interconnected financing arrangements”. That sentence is the whole of its comment on lending to the buildout. Its only AI-related decision concerns banks’ own operations: a review of how operational-risk losses are categorised, with a focus on cyber risk and AI. It announced no measure on banks’ credit exposure to data centres or to the private lenders financing them, and said it would keep monitoring.

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This quarter

27

$635 Billion of AI-Related Debt Issued in 2026, on Bank of America’s Count

Bank of America’s tally of debt raised for the AI buildout — bonds, loans, project finance and securitisations — reached $1.37 trillion since November 2022, $635 billion of it in 2026 alone. Investment-grade bonds lead at about $282 billion, then roughly $100 billion each of non-dollar bonds and corporate loans, and $84 billion of project finance, nearly half of it high-yield; data-centre securitisations add $18.2 billion. The bank underwrites these markets, and its perimeter is wider than the Goldman Sachs count recorded in August, so the two are not a series. The figures come via a Chinese wire’s account.

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Hyperscalers Are Nearly Half of This Year’s Sterling Corporate Bond Issuance

The Bank of England’s Financial Policy Committee recorded at its 25 September meeting that AI hyperscalers accounted for 47% of sterling corporate bond issuance so far in 2026. The record cites Morgan Stanley’s estimate that global AI-related debt issuance had reached about $450 billion by early September — more than double all of 2025 — and JP Morgan’s of about $4.1 trillion of debt-financed AI capital spending from 2026 to 2030, with Morgan Stanley expecting private credit to finance $700 billion of data-centre spending over 2026–28. These are bank estimates, not the committee’s own counts.

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Oracle Sends a Force Majeure Notice on the Campus Those Loans Paid For

Oracle sent a force majeure notice on Project Jupiter to its developer, a Blue Owl Capital unit. Bloomberg, citing people familiar, reported that Oracle wants to delay payment if the site is not online as expected in 2028; CNBC confirmed who received the notice. The lenders’ security is the lease. Oracle said the project “remains on our planned schedule”; Blue Owl said the notice “does not change the financial commitments”. Bloomberg later reported that the notice cites a delayed gas pipeline, and that if a power-related force majeure is agreed Oracle could defer rent for three years once payments start, while still owing it in full over the lease.

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SoftBank Borrows $11.1 Billion at Up to 9.75% to Pay for Its OpenAI Stake

SoftBank said it had issued $10 billion of dollar senior notes and €1 billion of euro notes, about $11.1 billion in all, mainly to pay the $10 billion final instalment of its $30 billion follow-on investment in OpenAI. CNBC describes the sale as junk-rated, with yields as high as 9.75 per cent on the seven-year notes. Completing the investment takes SoftBank’s cumulative stake to $64.6 billion, about 13 per cent of the company. The borrowing funds no data centre: it is debt raised to buy equity in an AI lab, repaid from what that equity proves to be worth.

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Data-Centre Securitisations Stop Trading With the Rest of Their Market

Bonds backed by data centres have detached from other asset-backed debt. Bank of America has BBB-rated data-centre mortgage bonds 147 basis points wider this year at 390, while fibre and cell-tower securitisations tightened by 21 and 34. Barclays put data-centre asset-backed spreads at 150 over Treasuries in September, 16 wider than a year earlier; its analyst Elana Lipchak said the sector now moves with “all the debt supply on the AI infrastructure trade from corporates”. In August a Morgan Stanley note still had these spreads near the year’s tightest. Bank of America’s figures come via a Chinese wire.

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$18 Billion of Loans Behind an Oracle-Leased Campus Trade at Stressed Prices

About $18 billion of loans financing Project Jupiter, a data-centre campus in Doña Ana County, New Mexico, that Oracle is to lease for OpenAI’s computing, slid into stressed territory. The Financial Times reported the loans quoted at 89 to 91 cents on the dollar by syndicate banks including Santander and Jefferies, amid local opposition and permitting delays. This is project-finance debt raised through a special-purpose structure with Oracle as tenant — not Oracle’s own bonds — which is where much of the buildout’s borrowing now sits. The price is the FT’s, read through outlets relaying it; no coupon, maturity or rating has been published, and a quoted price is a mark, not a loss.

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A Bitcoin Miner Sells $2.28 Billion of Junk Bonds on a Meta Lease, at 8.25%

CleanSpark, a bitcoin miner turned data-centre operator, sold $2.28 billion of five-year junk bonds — its first — on $10 billion of orders. Bloomberg calls it the first junk-bond offering for a data centre tied to Meta. The notes launched to yield 8.25 per cent, 1.75 points above the average BB borrower; similar deals with investment-grade tenants sold below 6 per cent earlier this year. Morgan Stanley led. The money helps build a Georgia site leased to a Meta subsidiary for 20 years and $6.6 billion, with Meta guaranteeing rent. Deal terms come from people familiar, not a filing.

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Hyperscaler Bonds Are Priced Like BBB Credit While Still Rated Above It

Hyperscaler bonds now trade at spreads similar to BBB-rated credit while rated above it — the market charging for risk the agencies have not marked. Barclays Private Bank's Michel Vernier, writing on 4 September, reads the fundamentals as sound: hyperscalers expect net debt below 1.0x earnings, and a conservative stress holds it near 1.4x — enough for negative outlooks or selective single-A downgrades, well short of BBB — against over $500 billion of liquidity. He puts 2026 issuance on track for $400 billion, after $160 billion in 2025 and $44 billion in 2024; others project nearer $250 billion, counting dollar bonds only. Barclays owns and recommends this paper.

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Hyperscalers Crowd the Long End of the Curve, and the Treasury Market Starts to Feel It

US hyperscalers have sold more than $180 billion of dollar bonds this year, piling unusually far into the ultra-long end: 41 percent of their 2025-26 issuance runs beyond 15 years against 16 percent for the broad index, with Amazon paper reaching 2076 and Alphabet's £1 billion century bond — the first from a technology company since Motorola in 1997 — drawing £9.5 billion of orders. TwentyFour Asset Management, a fixed-income manager, argues this long-duration supply now competes with 30-year Treasuries for the same pension and insurance money, a marginal push on a long-end sell-off that US-deficit dynamics still dominate. Demand held firm, with recent 30-year deals 3.6 to 4.6 times covered. The reading complements the ECB's finding a week earlier of no crowding-out of European borrowers.

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A Dozen Banks Ladder $15 Billion of Credit for Anthropic, With IPO Roles Attached

Anthropic is set to finalise expanding its revolving credit facility to $15 billion — six times the one it signed last year — Bloomberg reported on 3 September, citing people familiar; nothing is filed and the terms could still change. Morgan Stanley leads, with Goldman Sachs, JPMorgan and Citigroup prominent; the same four lead the IPO. Barclays and Wells Fargo are expected in key roles, ahead of Bank of America, Deutsche Bank, RBC, UBS and seven more. The ladder is the point: about $1.25 billion sought from the most active lenders, $1 billion from the next tier, $750 million or less below that — rank on the loan tracks rank on the listing.

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The ECB Finds No Crowding Out — and Investors Charging the Hyperscalers More Anyway

The European Central Bank has looked at what US hyperscalers are doing to Europe's corporate bond market, and found two things that do not point the same way. Crowding out has not happened: cover ratios for euro area issuers held firm through 2026 while hyperscalers' edged down, and some European borrowers simply timed their deals to avoid the days big tech came to market. But hyperscaler credit spreads are widening across every maturity on news of higher AI capex, while other issuers' spreads stay flat — investors repricing one sector, not the market. US big tech now accounts for just under 10 percent of gross new euro-denominated corporate issuance, with about €40 billion outstanding; Amazon's deal this year set an all-time size record. The ECB's own caution: AA- ratings for a new sector rest on revenue-growth and leverage assumptions that may not hold.

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Banks Keep Arranging the Data-Centre Loans, and Keep Moving the Risk Off Their Books

The largest data-centre lenders — JPMorgan, Goldman Sachs, Citi, Morgan Stanley and Wells Fargo, with Bank of America pledging $250 billion — are passing the credit risk to less-regulated buyers rather than holding it. Drawing on Morningstar, American Banker describes banks using syndication, significant-risk-transfer trades, loan sales and securitisation to push exposure onto insurers and private-credit funds while still originating: Morgan Stanley and KKR arranged a $9.7 billion warehouse facility for CyrusOne, and BofA provided $14 billion for the Oracle/OpenAI campus in Saline Township, Michigan. The Bank of England's July financial-stability report found the financing already spread across public debt, private credit, leveraged finance, securitised assets and SPVs. Morningstar's Arnaud Journois warns the migration to nonbanks cuts transparency and echoes 2008.

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Big Tech Is Now a Tenth of Europe’s Corporate Bond Issuance

ECB staff put hyperscalers’ combined capital expenditure need above $1 trillion by 2028 — about 3 per cent of annual US GDP — and trace where some of it is being raised. Alphabet, Amazon, Meta, Microsoft and Oracle hold roughly €40 billion of euro-denominated bonds, just over 1 per cent of benchmark indices, with the euro accounting for close to a tenth of their outstanding stock. Their share of euro-denominated ‘reverse Yankee’ issuance almost doubled between 2025 and 2026, and US big tech is now just under 10 per cent of gross new euro-denominated non-financial corporate issuance. Amazon and Alphabet were the largest issuers in that market this year, Amazon’s deal setting an all-time size record. This is a staff blog, not an ECB position, and says so.

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Rated AA on Assumptions About the Thing in Question

The same ECB staff name three risks. Concentration: hyperscalers were 15 per cent of the increase in domestic euro-denominated corporate bond holdings in the year to March 2026, bought heavily by pension funds and insurers. Crowding out: the borrowing surge ‘could make it harder for other companies and other economic sectors to access finance by reshaping investors’ asset allocations’. And ratings: because AI is a new sector, agencies’ approach ‘may be based on assumptions on future revenue growth and leverage which may not stand the test of time, heightening the vulnerability to mispricing of credit risk’. They note AI demand for long-dated funding has reportedly pushed up US long-term real yields, with no such spillover yet in the euro area.

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A Loan Secured on GPU Servers Is Rated Investment Grade

Lambda closed a $926 million senior secured term loan B on 27 August, priced a fortnight earlier, secured on the GPU servers the money buys and the cash flows those servers earn. Moody's rated it Baa2 — investment grade, on collateral the loan's own schedule assumes will wear out: it matures on 31 December 2030 and amortises fully in step with the contracted revenue and the hardware's expected useful life, at SOFR plus 3.00%, issued at 99.5. Morgan Stanley was lead left arranger and administrative agent and MUFG joint bookrunner, with Citizens Bank, Crédit Agricole and Wells Fargo as documentation agents. Lambda calls it the first broadly syndicated, investment-grade-rated term loan B by a private cloud provider, and its second large debt raise this year after a $1 billion facility in May. The customer whose contracted payments underpin the loan is described only as investment grade, and is not named.

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An investment-grade rating on a term loan B signals that AI infrastructure has arrived as an investable asset class, standing alongside other contracted, income-producing assets.

— Michel Combes

Michel Combes, Lambda's chief executive, on the closing of the company's $926 million GPU-backed loan. He added that Lambda expects "to return to this market as we scale." The rating is real and Moody's is disinterested; the reading of what it means for the asset class as a whole is the borrower's own, made by a company that funds itself this way and intends to keep doing so.

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$1.1 Trillion of the Buildout's Leases Are Not on Anyone's Balance Sheet Yet

The question this page exists to ask — where the risk actually sits — now has a number. On data to 17 August, J.P. Morgan Asset Management puts disclosed hyperscaler data-centre lease obligations at about $1.4 trillion, of which roughly $1.1 trillion is off balance sheet, because a lease is recognised only once the data centre becomes operational. Separately, unconditional purchase commitments for chips, compute and power come to about $1.5 trillion. Underneath sits a structural shift: hyperscalers increasingly raise debt through ring-fenced project-finance vehicles secured on a single project's cash flows rather than the parent, which preserves balance-sheet flexibility and makes leverage harder to read. Reported leverage, the firm notes, is no longer the measure that matters.

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Hyperscaler Bonds Lose Their Scarcity Premium

The cash bond market has repriced the buildout. Hyperscaler spreads widened about 30 basis points this year against 2 for the broader dollar investment-grade index, and duration-adjusted they now trade near 105 basis points against roughly 80 for similarly rated paper. The widening accelerated in July after larger — and, J.P. Morgan Asset Management notes, less well-flagged — issuance, and is sharpest at long maturities where the buyer base is thinnest. Supply explains the scale: hyperscalers have gone from 2 percent of dollar investment-grade issuance across 2022–24 to an expected 9 percent this year, with $219 billion issued so far. The firm suggests the long-end issuance may itself be lifting long-dated Treasury yields.

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J.P. Morgan Asset Managementam.jpmorgan.com75% credibility · not yet testedAn opening estimate from its institutional history — none of its claims checked yet.
We estimate that hyperscalers could issue USD 300 billion in investment-grade bonds over the next year alone.

— J.P. Morgan Asset Management

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A $1.3 billion mezzanine loan shows how the AI buildout's debt is actually stacked

Eagle Point Credit Management, a $14 billion investment firm, is providing about $1.3 billion of a roughly $16 billion project-finance package for Nexus Data Centers' first campus — a gas-fired site at Hubbard, Texas, with Anthropic as primary tenant. Eagle Point's piece is the single largest in the loan, but it is mezzanine debt, below the safest tranches; the mezzanine portion recently closed, with banks led by Morgan Stanley arranging the larger facility. The deal is a template for how this borrowing is structured. It firmed up only after Anthropic won the tenancy and Google agreed to guarantee the senior debt — the same backstop Alphabet has extended to data centres nationwide, which reassures lenders while concentrating the risk on one balance sheet. And construction debt like this is repaid by issuing more: Nexus may sell high-yield bonds later this year to refinance the bank facility, which would require its first credit rating. The figures come from a person familiar with the private deal, not a filing.

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The SEC's position lets sponsors of data-centre securitisations hold progressively less of their own equity in these deals, and will push the industry toward more of them.

— Orion Mountainspring

Three securitisation lawyers, reading the SEC staff's data-centre position against the financing structures now being assembled, converged on the same conclusion about who it helps. Orion Mountainspring of Orrick said sponsors "will be quite happy about the response from the SEC" because "it gives them the opportunity over time to push down the required equity in the deal." B.K. Lee of Alston & Bird said it "motivates the industry to create innovative ways to securitize data center revenues without the strict restrictions that Exchange Act ABS would impose" and "would reduce the kind of structured, rigid, prescribed ways of risk retention." Seth Messner, who leads the data-centre group at Katten Muchin Rosenman, said Latham "asked the SEC to tell them that data center securitizations aren't [asset-backed securities] and therefore aren't subject to the risk retention rules under Dodd Frank. The SEC basically agreed" — and that if Nvidia's compute-financing platforms plan to use securitisation, "that sounds very similar to what Latham was describing." Messner hedged that himself, and it is not established that those platforms are designed for securitisation at all. All three advise parties on the sponsor side of such deals, which is the position their reading is made from. The SEC and several ratings agencies declined to comment.

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AI borrowing becomes a risk factor inside the investment-grade index itself

Two of the largest institutions in the bond market published measurements four days apart that found the same thing: the buildout's borrowing has grown big enough to change what an ordinary investment-grade bond fund holds. BNY, whose custody business gives it a direct view of investor flows, reported total US investment-grade issuance of nearly $1.5 trillion in the year to 12 August — the largest on record — with hyperscalers more than 12% of it and behind eight of the ten biggest deals of 2026, and their share of the Bloomberg aggregate investment-grade index up 60% in a year. The same companies are more than a fifth of the S&P 500, so the same credits now sit on both sides of a conventional portfolio. PIMCO put the level at nearly 5% of the dollar investment-grade index against 1.2% of the euro one, on record net index-eligible supply of $120 billion in dollars and €22 billion in euros, and found that six of the eight non-financial American investment-grade companies raising more than $20 billion this year were AI-related. The mechanism is mechanical: index-tracking money buys what is issued, so a borrower large enough to move the benchmark is bought by funds that never formed a view on it. Both firms attach limits to their own findings. BNY calls the absolute index share still modest, notes that indexing is far less prevalent in credit than in equities, says late July's simultaneous widening across the hyperscalers likely overshot and has since retraced, and reports that its own flow data did not show the investment-grade fund outflows described elsewhere. PIMCO reads the widening as supply pressure and investor fatigue concentrated in the dollar market rather than deterioration at any company — the same issuers' euro bonds held up better, and the share of the dollar index trading wide of the benchmark is at levels last seen in April 2025 while the euro market barely moved. Both are interested parties: PIMCO owns this paper and BNY custodies it.

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The cost of insuring the biggest AI borrowers against default hits records, in a market too thin to read

The price of protection against a hyperscaler default reached its highest levels on record. Oracle's credit-default-swap spread widened past 200 basis points, against about 40 a year earlier, on a debt load of roughly $130 billion. Societe Generale calculates that five-year spreads across the US hyperscalers now imply a cumulative default probability of about 7%, against roughly 4.5% for investment grade as a whole — though it says Oracle, whose own implied probability exceeds 16%, materially inflates the group figure. None of these companies has ever defaulted on its debt. The counterweight is the size of the market doing the pricing. Clearing data show credit-default swaps on sixteen technology firms traded a combined average of $637.5 million of notional a day in the second quarter of 2026 — about 4% of the $16 billion traded daily across all corporate and sovereign credit — on an average of 54 trades a day, a third of them in Oracle alone; fourteen of the remaining names averaged single-digit daily trades, and Apple's contracts did not trade at all. Reuters columnist Jamie McGeever reads the widening as demand for a cheap hedge rather than an expectation of failure: "These spreads aren't necessarily widening because investors believe these companies will default, but because CDS is a relatively straightforward and cheap vehicle to hedge against their increasing exposure to the AI sector." On a market this thin, a handful of hedging trades sets a price that everyone else then reads as a signal. Reuters is unreachable to direct retrieval; its column is recorded from the Globe and Mail's licensed carry of it.

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US regulators clear the way for more AI data-centre debt, exempting it from post-2008 securitisation rules

The SEC's staff determined in a letter that a major subset of data-centre securitisations are not "asset-backed securities" in the traditional sense — because a data centre is a physical facility rather than an amortising instrument like an auto loan — and therefore need not meet the disclosure and risk-retention requirements imposed after the 2008 financial crisis. Those rules had required a deal's sponsor to keep a slice of the debt on its own books to align its interests with investors; the exemption removes that constraint for facility-backed data-centre bonds (data-centre CMBS, backed by mortgages, is unaffected). The request that prompted it, filed by Latham & Watkins on 23 July 2026, sets out both the argument and the market it concerns. Its argument is that data centres "endure well beyond the tenor of the related securities" and "may appreciate in value", so they do not "by their terms convert into cash within a finite time period" and are not the self-liquidating financial assets the statute describes; and that payments to investors depend as much on an operator's ability to hold down running costs as on any lease. Its disclosures: the market has issued more than $50 billion of debt cumulatively since the first such deal in 2018, and these transactions are typically written at a loan-to-value ratio of no more than 70% of appraised value, with repayment anticipated at about five years and a final maturity of twenty-five to thirty. Investors have recourse to the assets, but generally none to the sponsor or operator except for fraud, wilful misconduct or gross negligence. Data-centre asset-backed issuance has climbed to $15.5 billion in 2025 from $2.4 billion in 2020 and is on pace for a record in 2026; a Morgan Stanley note (Katy Huberty) reports data-centre ABS spreads still near year-to-date tights even as broader hyperscaler and data-centre corporate credit has widened, which it attributes to supply technicals rather than deteriorating fundamentals. The staff's own response letter is not publicly retrievable; the request it answered is.

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Banks move to offload the $15 billion Anthropic data-centre loan into the bond market — the first sign of lender indigestion

Days after lining up the $15 billion loan for the Google-backed, Anthropic-leased Nexus campus in Hubbard, Texas, the Morgan Stanley-led bank syndicate is planning to push the debt off its own books — refinancing it in the bond market as soon as the loan draws, split into several bond offerings with some portion routed through the leveraged-loan market. The structure shifts risk onto investors: because Google's lease guarantee only takes effect once the data centre is complete, bondholders bear the construction-phase risk of delays and cost overruns, and the paper is expected to carry a speculative-grade rating. Bundling the centre with its on-site natural-gas plant into one financing further complicates pricing, as lenders must underwrite two different risks at once. The move is not isolated: banks had already spent months seeking buyers for more than $50 billion of construction debt on data centres leased to Oracle, and Meta's self-powered 'Project Walleye' had to offer higher yields to place its debt — early evidence that Wall Street's appetite for holding AI-infrastructure loans is cooling even as it keeps arranging them. This is deal reporting sourced to people familiar with the plans, not a filing; the Financial Times broke it and the substance is carried in full by Futu/wallstreetcn.

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AI-related debt issuance nears $500 billion for 2026 as spreads widen and institutional buyers pull back

The debt side of the buildout is now the dominant theme in credit markets. Goldman Sachs Research estimates nearly $500 billion of AI-related debt has been issued so far in 2026 — with the five hyperscalers only about 40% of it, having sold $194 billion this year against $108 billion in all of 2025 — and reports that appetite is starting to strain: the spread on its AI-leadership credit basket has roughly doubled over twelve months, from 74 basis points toward twice that, and orders from insurers, among the largest buyers of long-dated investment-grade paper, roughly halved in the 30-year part of the AI bond complex between the first quarter and late in the second. The exposure also reaches well beyond funded debt: S&P Global has identified about $675 billion of signed-but-not-yet-commenced hyperscaler lease obligations that sit outside reported corporate debt, and a Chicago Booth stress test of the wider financing system (chips, project finance, private credit and GPU-secured lending) put potential losses at up to $140 billion — while noting that, unlike 2008, most first-loss positions sit outside the regulated banking system.

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Banks in talks to lend $15 billion for a Google-guaranteed Anthropic data centre in Texas

A consortium of banks led by Morgan Stanley is in advanced talks to lend about $15 billion to developer Nexus Data Centers to build a 1.6-gigawatt campus and an on-site natural-gas power plant in Hubbard, Texas, dedicated to Anthropic. Google, which is supplying the chips, has agreed to provide financial guarantees standing behind the power and lease obligations that underpin the financing; Evercore is advising Nexus. The arrangement extends the buildout's newest instrument — the guarantee — that already runs through Nvidia's reported backstop of OpenAI's Ohio leases and Google's earlier agreement to stand behind Anthropic's lease payments: a supplier's credit substituting for a customer's balance sheet. This is deal reporting sourced to people familiar with the talks, not a filing, and the $15 billion is a financing structure rather than a figure disclosed by Anthropic.

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