Bloomberg: CoreWeave's troubles could lead to a phased closure of the AI junk bond financing market.

BlockBeats news, October 18 - According to Bloomberg, CoreWeave's financing moves are intensifying market concerns about AI companies' fundraising capabilities, with high-yield bond investors increasingly reluctant to provide funds to tech startups. CoreWeave's co-founder stated that the company is exploring entry into the investment-grade debt market and obtaining insurance institution funding, while its high-yield bond yields rose to 15% this week, reaching levels typically indicating debt distress. Creditors are worried that the company plans further large-scale borrowing.

CoreWeave stated that its financial condition is "fully sufficient" to support debt obligations, and Nvidia CEO Jensen Huang also came forward to defend the company's financial health. However, some investors believe the core issue is not a sudden deterioration in corporate credit conditions, but rather the substantial supply of new debt still to come over the next year and a half.

Related concerns have spread to the broader high-yield bond market. On Wednesday, the market's average yield rose to 8.41%, an 18-month high, with risk premiums expanding to the highest level since March. AI cloud startup Volta Infrastructure's $5 billion leveraged loan also had its terms adjusted, ultimately paying a yield exceeding the 11% initially discussed by banks, approaching the highest level in AI infrastructure financing.

Goldman Sachs data shows that since the start of the year, companies have issued $106 billion in investment-grade and high-yield project financing bonds in the dollar market, much of it for AI investments such as data centers, nearly 3 times the $37 billion for all of 2025. Global related project financing bond issuance could exceed $300 billion next year. Meanwhile, the average price of high-yield data center bonds has fallen from $101 in June to near $95.

Grant Nachman, Chief Investment Officer at Shorecliff Asset Management, stated that at current market levels, unsecured financing for large "neocloud" providers may be too costly, impossible to complete issuance, or both. New deals may require asset or contractual cash flow guarantees and provide stronger creditor protections. If high-yield bond financing is blocked, companies may turn to convertible bonds, equity, secured debt, and securitization financing.