JPMorgan and Goldman Sachs widened the discount and added investor protections to sell financing for an unrated AI data-center builder, according to Bloomberg News. The banks underwrote only the $1.3 billion lease-payment tranche and sold the $3.7 billion GPU loan on a best-efforts basis.
The market for financing AI infrastructure is still open. This week it showed its price.
Volta, a builder of AI computing capacity, sold a $5 billion loan package on Thursday at terms wider than banks first offered, Bloomberg News reported, citing people with knowledge of the matter. The package was priced at 650 basis points over the benchmark SOFR rate, with an original-issue discount of 95 cents on the dollar, compared with initial talk of 625 to 650 basis points and 97 to 98 cents. The yield ended up above the 11% that banks had floated earlier, the people said.
To get the deal done, the arrangers added investor protections and a prepayment penalty, and agreed that the margin would change if Volta obtains certain credit ratings, according to one of the people. JPMorgan declined to comment to Bloomberg, and Goldman Sachs and Volta did not respond to its requests.
Two loans, two levels of comfort
The package has two parts. A $1.3 billion term loan, which JPMorgan and Goldman underwrote, will fund lease payments to Bitdeer for a data-center complex in Norway. A $3.7 billion loan secured by chips will buy about 36,000 Nvidia graphics processors. The banks marketed that second piece on a best-efforts basis rather than committing to it.
The structure shows where the banks drew their line. They committed their own balance sheets only to the smaller tranche, which funds Volta's lease payments for the data-center complex. The larger piece, backed by GPUs that can lose value as newer chips arrive, they offered to the market without a guarantee. Anthropic has a six-year agreement to buy computing capacity at the site, according to people familiar with it. The investor objections, as Bloomberg reported, centered on the loan being unrated, large, from a first-time borrower and marketed in a volatile week.
The math of the discount
Moving the issue price from 97 or 98 cents to 95 means investors pay 2 to 3 cents less for each dollar of loan, which raises their effective return. The spread landed at the top of the original range. Together, a wider discount, a spread at the top of the range and new protections show a deal that needed concessions to sell.
The loan is unrated, and collateralized loan obligation managers, among the biggest buyers of leveraged loans, objected to it, Bloomberg reported.
The backdrop
Volta priced its loan during a rough week for AI debt. CoreWeave, the most closely watched borrower in the group, saw the yield on its notes due 2031 rise above 16% this week, with a measure of its credit risk at a record. CoreWeave shares closed Thursday at $69.69, and Bitdeer at about $8.40.
Market implications
One reading is that the deal proves capital is available. A $5 billion financing for a debut, unrated borrower was sold in a week when AI credit was under strain, which suggests lenders will fund the buildout at the right price.
A second reading is that AI infrastructure credit is being repriced. An issue price of 95, a yield above 11%, added investor protections and a GPU tranche the banks would not underwrite, alongside CoreWeave notes yielding above 16%, show lenders charging more for this kind of risk than the banks first offered only weeks ago.
What to watch
Whether Volta or Bitdeer confirms the terms, any rating assigned to the loan, where it trades once it frees to the secondary market, and the terms of the next AI cloud financing to come to market.