The Financial Times said SpaceX five-year credit default swaps rose to 194 basis points after a report that the company is seeking 40 billion dollars to buy Nvidia chips.
A measure of credit risk at SpaceX rose to a record after the Financial Times reported that the company is seeking to raise 40 billion dollars to buy Nvidia chips. The FT said the spread on SpaceX's five-year credit default swaps rose to 194 basis points on Wednesday. That means it cost 19,400 dollars a year to insure 1 million dollars of the debt. The contracts began trading in June at about 110 basis points.
Investors also sold SpaceX bonds. The FT, citing MarketAxess, said the yield spread over Treasuries on the 2056 bond rose 0.09 percentage point on Wednesday to 2.36 percentage points, from 1.75 percentage points in June. The company raised 25 billion dollars of investment-grade debt in June, the paper said.
The FT said the planned raise is 10 billion dollars of bank loans and 30 billion dollars of investment-grade debt. It reported the fundraising plan on Tuesday. The Wednesday story treated the wider spreads as the market response, not as confirmation that the deal had priced.
The same report said other AI-linked borrowers have also seen credit costs rise. Oracle's five-year CDS had climbed 40 basis points since the start of the previous month to 244. Nvidia's five-year CDS was about 81 basis points, up from 45 in early July. Contracts on Alphabet, Meta and Microsoft were quoted close to record highs, the FT said.
The new development is the recorded jump in SpaceX credit risk after the reported borrowing plan. The FT did not say the chip purchase or the 40 billion dollar raise had closed.