North America Private Debt Loan: CoreWeave’s US$7.5bn financing
AI landmark lending
Artificial intelligence infrastructure company CoreWeave’s US$7.5bn loan package reflects an often-touted selling point for private debt firms: their ability to develop creative structures to meet the needs of companies in emerging industries.
As the broadly syndicated loan market bounced back in 2024 to reclaim market share from direct lenders, private debt firms sought to differentiate themselves by offering features such as delayed draw term loans and the option to pay in kind. Those features have helped the firms become the lenders of choice for many fast-growing technology companies, which may lack the assets and earnings that traditional lenders seek.
Though CoreWeave is one of the leading companies in its field – providing tech companies with access to cloud computing clusters optimised for AI applications – its industry is still a relatively unfamiliar one for lenders. To address that risk, CoreWeave’s debt facility used a novel set of assets as collateral, including the company’s graphics processing units and its contracts with customers, and a structure that divides the financing between investment-grade and speculative-grade tranches.
Blackstone led the transaction, providing some US$4.5bn through its tactical opportunities group and its credit and insurance division. The asset manager has heavily focused on AI investments and previously co-led a US$2.3bn debt financing for CoreWeave in 2023, which helped the firm get comfortable with such a large financing to a company in a developing industry.
“The amount of time and effort to do a first-of deal and then to do it in that size, I think, was bold,” said Jas Khaira, a senior managing director in Blackstone’s tactical opportunities group. “When we have that conviction and something we really know and understand, we’re willing to make those bold bets.”
The financing package, which includes an accordion feature allowing the facility to grow to US$7.5bn, is one of the largest private debt financings ever completed. Blackstone’s commitment is the largest the firm has ever made to a new loan. Magnetar Capital, Coatue Management, The Carlyle Group, CDPQ, DigitalBridge Credit, BlackRock, Eldridge Industries and Great Elm Capital Corp also participated in the transaction.
The novelty of the financing came at a price. The two investment-grade tranches, totalling roughly US$5bn, priced at about 600bp over SOFR and 650bp over SOFR, and the speculative-grade tranche priced at about 1,300bp over SOFR. The split structure offers CoreWeave flexibility to work with customers with varying credit profiles, including established tech companies and emerging startups, Khaira said.
“No one had ever financed GPU chips before, period, and certainly not in a US$7.5bn context,” Khaira said. “It is a landmark transaction for Blackstone, but also for the industry.”
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