As reported by Bloomberg, cloud computing firm CoreWeave Inc. has obtained $7.5 billion of debt financing. A majority of this is in the form of investment-grade loans, with Blackstone Inc. being the primary leader of the financing round.
The senior secured debt has an interesting hybrid structure, which is divided between investment-grade and non-investment-grade tranches. The asset backing these debts primarily include microchips. This data was provided by insiders, who chose to remain anonymous while discussing this confidential transaction.
It’s worth noting that there are two investment-grade rated tranches, totaling to about $5 billion. Their interest rate margins have been set at 6 percentage points over the Secured Overnight Financing Rate (SOFR) for one tranche, and 6.5 percentage points over SOFR for the other.
This significant financial move showcases the current high demand and growth in the cloud computing field. It also highlights how companies like CoreWeave are financing their expansions in such a competitive environment.