Topic
Derivative contracts that insure a borrower's debt against default; their spreads are a market gauge of credit risk.
CoreWeave's 2031 bond yield passed 16% and the cost to insure its debt topped 1,000 basis points, a record. The strain sits on one loss-making borrower, and the sources do not show it spreading across AI infrastructure.
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CoreWeave's 2031 bonds yield above 16% and its default swaps trade near 1,000 basis points, Channel NewsAsia reported. At that yield a $10 billion raise would cost $1.6 billion a year in interest, three-quarters of the $2.13 billion loss analysts expect this year.
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Credit default swap costs on US tech borrowers hit record levels, with CoreWeave's above 1,000 bps against about 60 for an investment-grade index. Demand has also risen for Apple, Amazon and Microsoft, but the widest spreads sit on indebted names in a market that can trade in single digits a day.
Reality
Oracle's five-year credit default swaps hit a record 261 basis points in early October, about three times Nvidia's 80 to 87. Broadcom's record 136 sits between them, in a ranking that tracks which companies are borrowing to build AI infrastructure themselves.
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SpaceX's five-year credit default swaps hit a record 197 basis points on October 7 after reports of a roughly $40 billion debt raise for Nvidia chips. Its 2056 bonds had already widened 51 basis points before that news, so creditors were repricing its debt load before the chip plan came up.
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France's five-year default swaps rose to 81 basis points on Friday as its 10-year yield hit 4.989%, the highest since 2002. Macquarie's Thierry Wizman calls outright default unlikely but puts the odds of a budget-straining National Rally presidency near 50%.
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SoftBank is marketing junk bonds at yields up to 9.875% to raise more than $11 billion toward nearly $65 billion of OpenAI commitments. The yields are the company's highest ever at those maturities, and high-yield buyers are still competing to lend at them.
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