Market Flux Event
SpaceX $40 Billion Debt Deal Nears Close at Sharply Higher Rates as AI Lending Jitters Grow
Read this in the Market Flux appSpaceX is finalizing a $40 billion debt raise at materially higher borrowing costs than its previous bond issuance, a sign of cooling investor appetite for AI-related lending. The deal, led by Apollo Global Management and Goldman Sachs, is expected to price next week. The lowest-rated tranche is set to carry an interest rate of approximately 8.3%, while a safer portion of the debt, backed by some of SpaceX's AI chips, is expected to price around 7.75%.
The chip-backed tranche alone would come more than 1 percentage point above where SpaceX's existing bonds currently trade, a gap that reflects a broader pullback in the AI loan market since SpaceX's IPO in June. The funds are intended to finance a massive expansion in Nvidia GPUs and data center infrastructure. SpaceX had posted a $541 million quarterly loss, with capital expenditures running at more than double its revenue, underscoring the scale of the buildout it is trying to fund through debt markets.
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Sources
- BusinessConsider the recent rise in global bond yields a red flag (via @opinion)
- FinancialjuiceSpaceX lower-rated debt to price at ~8.3% - Semafor $SPCX
- FirstSquawkA SPACEX DEBT DEAL IS BEING LED BY APOLLO AND GOLDMAN SACHS, WITH SPACEX’S LOWER-RATED DEBT TO PRICE AT ABOUT 8.3% - SEMAFOR
- WallstengineSpaceX $SPCX is finalizing a $40 billion debt raise at sharply higher borrowing costs than its previous financing, according to Semafor. The lowest-rated portion is expected to carry an interest rate of around 8.3%, while a safer portion backed by AI chips could price near 7.75%. The safer portion is expected to price more than 1 percentage point above where SpaceX's existing bonds trade. The deal, led by Apollo and Goldman Sachs, is expected to be finalized next week.
- Seeking AlphaS&P 500: Junk Bonds Worry Me More Than AI Hyperscalers
- SemaforSpaceX’s $40 billion debt raise is being finalized at sharply higher interest rates than when the rocket company last tapped bondholders, a sign of growing jitters in the AI world. Read more from Ellen DiMauro and @lizrhoffman:
- LizrhoffmanThe steepest piece of the $40B debt pile SpaceX raising right now will cost it more than 8% - and that’s investment-grade! Getting dicey out there