Weekly Debt Capital Markets Digest
News
Articles I found interesting. Doesn’t mean I agree with their takes.
NVIDIA teamed with private credit firms to mobilize $500B for hyperscalers and frontier labs to build data centers and buy NVIDIA GPUs. AI compute is emerging as a new asset class, akin to 1970s CMBS (CNBC)
Blackstone is considering abandoning its plan to raise $3B through a collateralized fund obligation (CFO) to return cash to investors after struggling to find a buyer for the CFO’s equity tranche (Bloomberg)
SEC exempts data center ABS from the disclosure, investor protection, and risk retention requirements that apply to traditional ABS, making it easier for data center operators to issue debt (Bloomberg)
Lenders began diligencing community and political opposition before committing to data center projects to avoid wasting time and resources. In 1H26, at least 75 projects worth $130B faced local opposition (Reuters)
Review of 12k comments supporting private assets in 401(k) found signs of a fake campaign, including comments submitted on behalf of deceased people. The 30k opposing comments appear legitimate (Bloomberg)
Signs of stress are emerging in private credit despite the industry’s upbeat tone, with loan defaults at their highest since 2021 and returns declining (WSJ)
High leverage and high interest expense weigh on Software’s otherwise very healthy operations. This deep dive examines AI’s impact on software businesses and software ARR loans (Bloomberg)
Private credit has been tightening loan structures, reducing the use of PIK among other things. PIK provisions appeared in 13.5% of new deals originated in Q2’26, down from 25% in Q4’25 (WSJ)
Private credit finances ABS (“Anything But Software”) deals, showing a preference for industrials with tangible assets and remaining highly selective when it comes to software (Bloomberg)
Mark Walter’s Delaware Life and Clear Spring are working to unwind $20B+ of private credit investments reclassified as affiliated assets amid a U.S. prosecutors’ probe (Financial Times)
Banks charge BDCs a premium on loans during rate hikes, despite their more favorable risk profile than non-BDC borrowers, according to a study by Fed economists (Financial Times)
BofA commits $250B to U.S. infrastructure through direct lending, underwriting and investment in areas such as AI and energy, as part of Trump initiatives and U.S.’s 250th anniversary (Financial Times)
Regional banks see stronger C&I loan demand, with 16% reporting higher demand from small and mid companies, up from 5% last quarter, as AI-driven capex spending trickles down (Yahoo Finance)
The U.S. government sold $25B of 30Y bonds at the highest interest rate since 2001, 5.216%, as investors demand greater compensation for inflation and fiscal risks (Bloomberg)
Deutsche Bank is the first European bank appointed as a yuan clearing house, as China seeks to challenge USD dominance. Low rates have fueled a surge in yuan borrowing by foreign companies (Financial Times)
China is shifting AI funding from state-sponsored to cap. market-driven, as U.S. competition intensifies. Tech firms raised $38B in 2026, the most since 2016, at an average yield of 1.9%, 300bps below the U.S. (Bloomberg)
African local-currency debt has outperformed emerging-market debt this year, returning 5.5% vs. 3.2%. Returns vary widely, with Zambia up ~35%. Yields reach 16% in Uganda, 18% in Zambia, and 21% in Nigeria (Bloomberg)
Alternative investment firm 777 Partners filed Chapter 11 with $2.7B of debt, after being under restructuring advisors since 2024. Prosecutors accuse its founder of using fake invoices to inflate the firm’s finances (Bloomberg)
DOJ and CFTC are probing transactions involving Radiant World, one of the world’s largest iron ore traders, over concerns that the company provided banks with falsified trade documents (Bloomberg)
Transactions
Apollo reached a $2.6B financing deal with the New York Yankees. Proceeds will be used to refinance existing debt and fund franchise growth (WSJ)
JPMorgan led a $441m debt financing for Global AI, a two-year-old AI infrastructure company with $6.2B of contracted revenue, including $1B from infrastructure already built and delivered to clients (Bloomberg)
UBS provided a 12-month extension on software company ION’s $460m revolver, pushing its maturity to July 2027. ION is the most indebted software company in Europe (Bloomberg)
Blue Owl raised $750m of BBB+ 10-year notes to repay its revolver, pricing at +2.20% over Treasurys, tighter than the initial +2.50% talk. Strong demand allowed the deal to be upsized from $500m (Bloomberg)
NVIDIA-backed neocloud Lambda raised a $926m, 4.4-year loan, led by Morgan Stanley. The loan was priced at 99.5 cents on the dollar with a SOFR + 3.00% spread, with proceeds funding GPU acquisitions (Yahoo Finance)
ZenithArc, a data center developer, sold $2.25B in “green bonds” to fund construction of a facility leased to Jane Street. The five-year notes are priced at 99.5 cents on the dollar and yield ~9% (Bloomberg)
Kenya to raise $5.4B over the next 9 months, including $800m USD-denominated, $500m Sukuk (Islamic), $300m Panda (Chinese yuan), $900m Samurai (Japanese yen), and the rest from World Bank, AfDB and others (Bloomberg)
Chart of the Week
Few things matter more to markets right now than the AI buildout. Its sudden scale has become a major US economic stimulus, shifting macro data. Columbia Business School’s Stijn Van Nieuwerburgh estimates AI infrastructure investment at 2.8% of GDP, larger than the railroad boom and still rising. He argues that without it, the US would be in recession.
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Overly interesting. A deep debt analysis about AI would be something interesting to see.