CoreWeave, Nebius and Nscale effectively shut out of the bond market as AI lenders tighten terms

What happened? AI cloud providers CoreWeave, Nebius and Nscale, the so-called neoclouds that borrow heavily to build data centres and resell GPU capacity, have effectively been shut out of the bond market in recent weeks, the Wall Street Journal reported on 31 October, citing people familiar with the matter. Lenders and investors are getting choosier and demanding stricter terms as the AI build-out enters a new phase.

Context The strain shows in secondary-market pricing: CoreWeave bonds issued earlier this year with a 9.75% coupon have recently traded at yields above 15%, and IFR reports several data centre financings on hold. "The bar is going higher and higher in terms of proving to lenders that this investment will turn into sufficient revenue," Pimco CIO Dan Ivascyn told the WSJ. Capital is still available on tougher terms, for example through secured, contract-backed facilities such as Nebius's $3.5B Citi facility.

Sources Wall Street Journal, IFR