Broadcom Credit Risk Climbs on Potential $60 Billion AI Chip Financing Guarantees
Updated
Updated · Yahoo Finance · Aug 24
Broadcom Credit Risk Climbs on Potential $60 Billion AI Chip Financing Guarantees
3 articles · Updated · Yahoo Finance · Aug 24
Summary
Broadcom’s 5-year credit default swaps jumped 28 basis points in August, while its 2031 bond yields rose about 14 basis points, signaling investors are demanding more protection against its credit risk.
The move tracks talks for more than $60 billion of debt financing tied to AI chips, in which Broadcom could guarantee part of a senior-secured tranche benefiting Anthropic and other companies.
Broadcom already agreed earlier this year to backstop most of a $35 billion debt package used by Apollo, Blackstone and others to buy custom AI chips for lease to Anthropic.
JPMorgan warned such guarantees add to “phantom leverage” across the AI buildout, as chipmakers effectively use their balance sheets to support clients and could face billions in obligations in a downturn.