Key points
- Anonymous seller auctions Stargate and CyrusOne loans
- SpaceX default protection reaches another record
- CoreWeave bond spreads top our AI borrower table
- How JNK and HYG junk bond funds fared
An anonymous seller is auctioning about $500 million of data center loans, including a piece of the debt behind the Stargate site in New Mexico. The sale surfaced Thursday as the Nasdaq Composite fell 5.52%, its worst day since April 2025. AI-related debt also came under pressure.
The cost of insuring SpaceX (SPCX) debt hit a record. Junk bonds tied to CoreWeave (CRWV) and Galaxy Digital (GLXY) were among the biggest decliners in the high-yield market, according to Bloomberg. Two of the largest junk bond ETFs fell less than 0.4%.
A dozen loans are for sale
The seller is taking offers on a dozen loans through a bids-wanted-in-competition process. In that process, a holder lists the debt and buyers submit competing prices. Bids are due Nov. 19 and must be at least $10 million.
The package includes a $25 million slice backing the New Mexico site, which is part of the Stargate project of OpenAI, SoftBank, and Oracle (ORCL). It also includes debt tied to Vantage Data Centers and CyrusOne. The report described the auction as among the first of its kind to hold only data center debt. It doesn't name the seller or give any prices.
Loans for the New Mexico site have been quoted at a discount before. Banks quoted about $18 billion of them at 89 to 91 cents on the dollar in September, the Financial Times reported at the time. Oracle also sent the developer a notice citing force majeure, a clause that can excuse a party when events outside its control get in the way. The developer of power infrastructure for Oracle's New Mexico data center agreed to delay a deadline for action on a key air permit, giving state regulators more time to review it.
The report said the auction reflects broader pessimism about the AI buildout after the midterm elections. In Texas, where many developers have a presence, Governor-elect Gina Hinojosa has called for a moratorium on data center construction.
SpaceX protection costs hit a record
A credit default swap works like insurance on a company's debt. SpaceX's five-year contract widened by as much as 14.6 basis points Thursday to a record 284.3 basis points, according to ICE Data Services. At that rate, protecting $10 million of debt would cost about $284,000 a year, before any upfront payment. The price was 150 basis points two months ago.
The move extended a rise sparked by election results that raised political risks for Elon Musk's Texas-based companies. SpaceX shares closed down 9.05% at $123.62.
Goldman Sachs (GS) and Apollo Global Management (APO) are looking to syndicate portions of a roughly $40 billion chip financing for SpaceX. The two firms committed to the deal in October before it priced. Under the structure, a special purpose vehicle buys Nvidia (NVDA) chips and SpaceX rents them under a five-year agreement. SpaceX can't use force majeure clauses to pause payments, according to the report. SpaceX disclosed its lease commitment in an 8-K, and we went through the terms on Oct. 26.
Our bond data shows CoreWeave at a new high
Our AI debt tracker uses the daily holdings files published by two State Street funds. We calculate each bond's price from the market value and par amount in those files, then solve for its yield. The spread is the extra yield a bond offers over a Treasury of the same maturity at its current market price. A wider spread means the market is demanding more yield to hold the debt.
| Borrower | Oct. 8 | Oct. 28 | Nov. 4 |
|---|---|---|---|
| CoreWeave (CRWV) | 848 | 915 | 1,094 |
| Galaxy Helios (GLXY) | 617 | 666 | 781 |
| Edged | 479 | 656 | 735 |
| Core Scientific (CORZ) | 377 | 411 | 527 |
| Oracle (ORCL) | 242 | 268 | 290 |
Median spread by borrower, in basis points. Source: AIStockWire calculations from State Street holdings of JNK and SPBO.
CoreWeave's 1,094 was the highest reading since our data began on Oct. 8. Its bonds carried a median yield of 15.61% at a median price of 79.65 cents on the dollar. Edged and Core Scientific also hit highs for the period on Nov. 4. Our readings run a day behind, so Thursday's moves aren't in this table.
The median AI borrower's spread was 219 basis points above the median junk bond spread on Nov. 4. That gap was 103 basis points on Oct. 8. It peaked at 254 on Oct. 23 and Oct. 26, so the Nov. 4 reading was still below the high.
The broad bond market held up
The SPDR Bloomberg High Yield Bond ETF (JNK) fell 0.27% on Thursday. The iShares iBoxx High Yield Corporate Bond ETF (HYG) fell 0.31%. The iShares iBoxx Investment Grade Corporate Bond ETF (LQD) rose 0.15%.
The S&P 500 fell 4.36% the same day and closed at 7,353.73. The Cboe Volatility Index jumped 11.57 points to close at 28.18. Reuters said it logged its biggest intraday jump in more than 18 months. The Nasdaq's 24,315 close put it in correction territory, and we checked what happened after 31 past corrections.
Andrzej Skiba, head of BlueBay US fixed income at RBC Global Asset Management, said hedge funds have been heavy sellers of AI-related debt over the last few weeks. He described "massive hedge fund capitulation within the space."
Wall Street is weighing the risk that the credit market is nearing the limit of how much AI debt it can absorb, according to the same report. Our tracker counts $775 billion of AI financings that have priced or closed. Of that, $404 billion is bond sales by Microsoft (MSFT), Oracle, Meta (META), Alphabet (GOOGL), and Amazon (AMZN).
